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Honda plans new plant in North America

Honda plans new plant in North America

Honda Motor Co plans to spend about $456 million to build a sixth plant in North America to help meet growing demand.

Tokyo: Honda Motor Co plans to spend about $456 million to build a sixth plant in North America to help meet growing demand, the Nihon Keizai business daily reported on Tuesday.

The plant would have an initial capacity of about 150,000 vehicles a year, almost 10 percent of Honda's North American sales, and would go into production in 2009, the paper said.

The site of the new plant had not been decided, but it would likely be near an existing facility, it said.

Honda has two plants in Ohio, one in Alabama, one in the Canadian province of Ontario and one in the Mexican state of Jalisco.

A company spokesman declined to comment. Honda President and CEO Takeo Fukui will hold a regularly scheduled mid-year news conference on Wednesday. Japan's number three automaker sold about 1.66 million vehicles in North America in 2005.

The company currently has an annual output capacity in that region of 1.4 million units and it has been importing vehicles from Japan and other areas to fill the gap, the paper said.

The new plant will probably manufacture such models as the Civic and Fit subcompact, and the company may consider building a second line to double capacity to 300,000 units a year, it said.

Last month, Honda reported a more than doubling in fourth-quarter profit, helped by brisk overseas sales, a softer yen and accounting one-offs, and it said it planned a strong, product-led push again this year.

Honda expects its North American car sales to rise 4.6 percent to 1.76 million units in the business year that started in April, taking up almost half of projected global car sales of 3.72 million units, which would be up 9.7 percent year-on-year.

Honda shares were up 1.29 percent at 7,860 yen by 0008 GMT, outperforming a 0.95 percent increase in the Tokyo Stock Exchanges' transport sector sub-index.

first published:May 16, 2006, 15:36 IST