Honda opening up a new plant

On Wednesday, Honda president, Takeo Fukui announced to invest $1.5 billion to build a new car production and engine plant. Currently, Honda Motor Company Limited (TYO: 7267) has two car production plants; one in Tokyo in Saitama and the other in Western Japan. The 200,000 upa engine production facility will be constructed in Ogawa. The first unit will come off in 2009. Automotive World report:

In related news, president Fukui confirmed provisional plans announced in March that a subsidiary of the OEM that specialises in mini-vehicles, Yachiyo Industry Company, will construct a second plant that will be subcontracted to make engines and related components. This is due to become operational in 2010.

"Over the next three years Honda will start running next-generation production lines at four sites, including a transmission factory in the central prefecture of Shizuoka which will be renovated, to beef up competitiveness. This will be the biggest production reform in Honda's history," Takeo Fukui told a news conference.

USA

is the largest market of the Japanese car makers. As the country is observing an economic slow down, Honda has no plans to cut down its production at its North American Honda and Acura plants. To keep the plants operational, Honda will export cars to Russia. The company will also work hard to gain a better result in its domestic market despite the fact that auto makers are observing a slump in car sell.

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