Demand for Honda Motor Co. (IW 1000/43) vehicles is increasing. Last fall Honda Manufacturing of Indiana (HMIN) added 1,000 jobs, but it seems that isn't enough so the company added another 300 on Tuesday.
Early next year production the plant in Greensburg, Indiana will increase annual production to 250,000 vehicles -- an 50,000 unit increase. The company will invest $40 million to add production of the Civic Hybrid, which is the company's most popular hybrid model in the United States.
"Our team in Indiana has successfully managed many challenges in its first four years, including the launch of three all-new models and the expansion of our production capacity is a result of their efforts," said senior vice president Bob Nelson.
Considering current Honda Civic Natural Gas, Acura ILX Hybrid and future Civic Hybrid production, HMIN says that it has the most diverse alternative-fuel production capability of any plant in North America. Indiana was the first Honda plant in North America to build a hybrid vehicle when it started Acura ILX Hybrid production in April.
Since late last year, Honda’s seven automobile production plants in North America have been operating at or above their full straight-time capacity, which currently totals 1.63 million vehicles per year. In addition to the new second shift at the Indiana plant, Honda’s plant in Marysville, Ohio resumed second-shift production on Line 1 late last year.
Last November, Honda Manufacturing of Alabama, LLC announced that it will increase capacity by 40,000 units to 340,000 light trucks per year, starting this fall. This increase, plus the additional 50,000 units at Honda Manufacturing of Indiana, will increase Honda’s North American auto production capacity to 1.72 million units per year. Additionally, Honda’s capacity in the region will total 1.92 million units after its new Mexico plant starts production of the Fit sub-compact in the spring of 2014.
"Increasing production in Indiana will provide us with increased flexibility to adjust model mix at our other plants in North America," Nelson said, noting that Civic models also are manufactured at Honda of Canada Mfg., in Alliston, Ontario, which is producing the CR-V. "All of our plants build multiple models on the same lines, so our ability to adjust between models and among plants allows us to optimize use of our production capacity."
The additional capacity at Honda Manufacturing of Indiana also will result in increased purchasing from among more than 200 suppliers that manufacture parts and components for the plant’s production, mostly located in the Midwest. In addition, the engines and automatic transmissions for most of the plant’s production are manufactured at Honda plants in Ohio.
In 2011, 85% of the Honda and Acura automobiles sold in the U.S. were built in North America, using domestic and globally sourced parts, the highest rate of any international automaker. Honda expects this to grow to more than 90% local production in coming years.
Honda opened its first auto plant in the U.S. in 1982, in Marysville, Ohio, which will mark its 30th anniversary of U.S. auto production this year.