Honda To Build New Plants Across The Globe

The plants will be in Thailand, Vietnam, India and Argentina.

Honda Motor Co. announced July 18 a major global expansion as Japanese automakers race to meet fast-growing demand overseas to offset slumping domestic sales. Honda plans to build new plants in Thailand, Vietnam, India and Argentina while stepping up output in North America, even as Japan's shrinking population dims prospects for future sales growth in its home market.

Honda said it had already begun construction of a second auto plant in Thailand at a cost of about $200 million. Due to start up in the second half of 2008, the factory will eventually double the automaker's production in the country to 240,000 vehicles a year.

Honda has also started work on a second plant in the suburbs of Hanoi with an investment of $65 million to raise its production of motorcycles in Vietnam by 50% to 1.5 million units from the second half of 2008.

It confirmed earlier plans for a second auto plant in India with an investment of about $230 million that will churn out about 60,000 vehicles a year from late 2009.

In Argentina Honda plans to spend $100 million on a new automobile production plant to start up in 2009 with an annual production capacity of 300,000 compact vehicles to meet growing demand in South America.

In China, Honda unveiled plans for a $246 million research and development center in China to design a new Guangzhou Honda brand vehicle with its joint venture partner specifically for the Chinese market to go on sale from 2010. "It will be a low-priced car unlike anything Honda would sell on its own," said Honda president Takeo Fukui, who did not rule out the possibility of the vehicle being exported to Southeast Asia in the future.

Honda is also expanding in North America as Asian automakers step up the pressure on embattled rivals such as General Motors and Ford. It said its annual automobile production capacity in North America would reach 1.62 million vehicles by late 2008 after a new auto plant in Indiana and a new engine plant in Canada begin operating.

Honda is also expanding its aviation business, with plans to build a new plant in North Carolina to supply engines for its HondaJet business plane.

The automaker is also increasing output at its British plant in Swindon despite its frequent complaints that Britain's reluctance to adopt the euro makes it harder to compete with rivals in the 13-nation eurozone.

Copyright Agence France-Presse, 2007

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