The Japanese automaker’s two factories — in Ayutthaya and Prachinburi — have a total annual capacity of 270,000 units, but only produced about 150,000 vehicles last year. Production will cease at the Ayutthaya plant, which will be retooled to produce parts, Honda said.

Honda makes its Civic, Accord, CRV, HRV and City models in Thailand, with most available in both hybrid and combustion-engine versions.

Honda and its Japanese peers have been facing competition from Chinese EV makers such as BYD Co, while a drop in exports to India from Thailand also prompted the decision, a Honda spokesperson said.

“We didn’t see growth in Thailand’s auto market as much we expected,” the spokesperson said. “We wish to focus more on electrified cars, including EVs and hybrids, and make the production process efficient.”

Honda has a goal of having battery and fuel-cell EVs account for 100% of global sales by 2040.