Honda de Mexico, SA de CV (HDM), the Japanese multinational automobile manufacturer Honda’s production and sales company in Mexico, has revealed its plans to build an $800 million automobile plant in Mexico. The plant will be built mainly to produce subcompact vehicles for the markets in Mexico and North America. The decision to build the new plant can be considered as a subsequent reaction towards the industry’s inclination to increase low-cost export base in the region.
Advanced plant with increased production capacity
The new automobile plant that creates subcompact vehicles with fuel efficient technology is expected to commence operation in 2014. The new automobile production plant will be equipped with a superior and proficient manufacturing system, capable of producing 200,000 units per annum. The production process will be making use of local parts and materials, and hence, it is expected that it will be able to offer high quality products at a reasonable price to customers. Some parts will be sourced globally also.
According to a press release, the new plant will give fulltime job opportunities to about 3,200 employees, once it starts operating at full capacity. The plant located at the outskirts of Celaya, Guanajuato will be spread over 566 hectares. The new location is 340 km east of Honda de Mexico’s two plants in El Salto, Jalisco.
Even though the company has not revealed the name of the vehicle that will be rolled out from the new plant, speculations suggest that it might be fit, the single subcompact vehicle that Honda sells in the U.S. and Canada. The production base of Fit might be shifted from Japan to Mexico owing to the value of yen.
Reinforcing Honda’s presence in North America
The Mexican production plant marks Honda’s eighth auto plant, and its 10th auto assembly line in the North America region constituting Mexico, USA and Canada. This also indicates an investment increase of about $21 billion in the region. Honda, which currently employs more than 33,000 associates in North America, owns four auto-related automobile factories, two production facilities and car engines and two transmission plants in the USA; two auto plants and automobile engine plants in Canada; and auto plants in El Salto, Jalisco. With this new Mexican plant, Honda’s collective production capacity in North America will jump from the present 1.63 million units to 1.83 million units in 2014.
Honda currently manufactures Civic, Accord and CR-V, along with other as region-specific models such as Odyssey and Pilot. In the press release, Tetsuo Iwamura, president of American Honda Motor Compnay has expressed optimism regarding the new plant’s ability to increase the amplified demand for fuel-efficient subcompact vehicles in North America.
Honda also assures that the company will be committed towards strict adherence to environment-friendliness by ensuring minimal environmental impact by the new Mexican plant. Advanced methods of energy and emission reduction mechanisms will be put in place to make it a zero waste facility. All North American plants owned by Honda plants are designed to meet the ISO 14001 compliant international environmental governance.
Honda’s new towards building plant in Mexico is really attention-grabbing since the country is stalled in commotion due to the current drug war. Honda’s majority of car and light-truck sales (about 42%) come from North America, therefore it is a wise decision to capitalize on the region.
Alia Haley from www.gizmowatch.com
