With the goal of establishing a “highly efficient production structure that maximizes local content in Mexico and the rest of North America’, Honda De Mexico announced last week that it will construct a new transmission plant in Celaya, near the city of Guanajuato.

This plant will be on the same site as the new automobile plant currently under construction that will begin production of the Honda Fit in spring 2014.

Transmission production will begin operation in the second half of 2015 with an annual production capacity of 350,000 units, with plans to more than double annual output in the coming years.

Employment of 1,500 new associates is expected when the plant reaches its full production capacity of approximately 700,000 units annually.

The new transmission plant, Honda's third in North America, will produce continuously variable transmissions (CVTs) for automobiles built in Mexico, where further market growth is expected, Honda said.

When the new transmission plant reaches full production, Honda's transmission capacity in North America will exceed 2 million units, and will support Honda's capacity to produce 1.92 million automobiles per year in the region.

"We are establishing a production base with outstanding global competitiveness in CVT production in the same location as our new automobile plant in Celaya," said Tetsuo Iwamura, COO of Honda North American Regional Operations. "As we continue to advance our commitment to build products close to the customer, we appreciate the strong support we have received here in Mexico."

Honda established its first Mexican manufacturing operations in September 1985.  Two years later, Honda de Mexico started motorcycle import sales and, in March 1988, began production of motorcycle products and automobile service parts in El Salto, Jalisco. Automobile production began in 1995 with the Accord and, in 2007, production switched to the CR-V. Honda de Mexico has a current annual capacity of 63,000 automobiles.

With the new 200,000-unit Celaya automobile plant scheduled to begin operation in February 2014, Honda de Mexico's annual production capacity will increase to a total of 263,000 units. In 2012, Honda (IW 1000/30) sold 54,000 units in Mexico (up 150.6% from a year ago), with sales volume steadily increasing.

The new transmission plant in Mexico will join existing Honda transmission manufacturing operations in Ohio and Georgia, increasing Honda's annual transmission production capacity in North America from the current 1.375 million units to more than 1.7 million units in 2016, and to more than 2 million units when the Mexican plant reaches full capacity.