Honda to Increase Its North American Production

The growing demands for Honda’s fuel-efficient cars have encouraged the Japanese automaker to increase production capacity in North America and on its other plants elsewhere to maintain the momentum for global growth.

The annual production of Honda’s plant in North America will reach 1.62 million vehicles by fall next year from the current 1.4 million that is according to Honda Motor Co. President Takeo Fukui in an interview with reporters last Wednesday.

Honda’s President also said that the production capacity for Japan’s No. 2 automaker was being increased in other parts of the world as well. Honda, which produces the Accord and Acura cars with highly durable Honda wheel bearing, plans to build its first auto plant in Argentina and second auto plant in Thailand. The Japanese automaker also plans of setting up a research and development center in China that would build models designed for the growing Chinese market.

For North America, Honda is planning a new auto plant in Indiana that would become Honda’s seventh North America plant. The new plant is scheduled to begin production by fall of 2008 according to Honda President Fukui.

Later this year, Honda’s plant in Mexico will start making the CR-V sport utility vehicle with annual production capacity increased from 30,000 vehicles to 50,000 vehicles said President Fukui.

The demand for Honda vehicles is continuously increasing attributed to the automaker’s reputation in providing good mileage like for instance its Fit subcompact and CR-V especially during the times when gas prices are at their highest. But of course competition has also been intensifying especially now that automakers have started developing better car technologies that increase vehicles’ fuel efficiency and at the same time minimizing harmful environmental impacts.

Honda President Fukui said that Honda was contributing to local production with 80 percent of Honda cars sold and produced in North America. He said, "Honda will further accelerate its efforts to strengthen the core characteristics that make Honda unique in each business area."

He also added that Honda will boost production capacity at its plant in Mexico and Turkey. For Turkey, Honda is working to increase its annual production capacity to 50,000 vehicles from 30,000 by early 2008 to answer the growing demand in Europe.

Honda will also be investing an additional 23 billion yen or US$188 million for its plant in Thailand where demand is expected to increase. The new plant will be constructed next to Honda’s existing Thai plant and will have an annual output capacity of 120,000 vehicles thus doubling Honda’s production there. Operation of the new Thai plant is expected to start in the later part of 2008.

For Honda’s new plant in Argentina the Japanese automaker will invest around US$100 million. The new plant will also create 800 new jobs and will produce 30,000 compact passenger vehicles a year. Production will start on Honda’s Argentina plant on the later half of 2009 that is according to President Fukui.