Tokyo: Japan’s Honda Motor Co. has announced plans for a major expansion of its global production operations with new plants in Thailand, Vietnam, India and Argentina to meet growing demand overseas.
Honda also unveiled plans for a $246 mn (Rs984 crore) research and development centre in China to design a new vehicle with its joint venture partner there specifically for the Chinese market to go on sale from 2010.
In Thailand, Honda said it had already begun construction of a second auto plant in Ayutthaya Province at a cost of about $200 mn that will start up in the second half of 2008 and eventually double its 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 mn. The factory will produce 500,000 motorcycles a year from the second half of 2008, raising its annual production capacity there to 1.5 million units.
The Japanese automaker also confirmed plans which it first announced in January for a second auto plant in India with an investment of about $230 mn that will start up in late 2009 and churn out about 60,000 vehicles a year.
In Argentina Honda plans to spend $100 mn on a new automobile production plant to meet growing demand in South America. The facility, to be constructed in Buenos Aires province, will start up in 2009 with an annual production capacity of 300,000 compact passenger vehicles.
Japanese automakers have been ramping up their global production facilities to keep pace with brisk demand for their vehicles overseas and to take advantage of lower labour costs outside of Japan.
Honda Motor has enjoyed years of record profits but its earnings slipped slightly in the last financial year to March amid tough competition in its home market and higher raw material costs.