Honda to Build New Plants in U.S., Canada

Honda Motor Co. will build new plants in Japan, the United States and Canada to boost production amid soaring demand for its vehicles, the company's president said Wednesday.

The two auto plants each in Japan and the U.S. and an engine plant in Canada are aimed at meeting an ambitious 34 percent increase in annual sales to 4.5 million vehicles a year by 2010, Honda President and CEO Takeo Fukui said.

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He did not specify the location of the auto plant in the United States. The automaker already has two plants in Ohio and one plant in Alabama. It also has a plant each in Canada and Mexico.

News of Honda's plans set off a rush among U.S. state officials eager to lure the investment and new jobs.

On Tuesday, Indiana Gov. Mitch Daniels said his office and the Indiana Economic Development Corp. have been working with Honda for the past year hoping to land a new assembly plant. Attorneys representing Honda were scheduled to meet Wednesday with local officials in Greensburg, about 50 miles southeast of Indianapolis, Mayor Frank Manus said.

David Iida, a Detroit-based spokesman for Honda, declined to comment.

Also Tuesday, Ohio officials said Honda aims to expand its engine plant in Anna in western Ohio, and is considering the state as the site for the new plant.

Besides the new plants, the company will double production in Brazil to 100,000 units by 2008, and double output in India to 100,000 by 2007, Fukui said.

The U.S. plant will cost an estimated $400 million and will employ 1,500 workers, Fukui said. That plant would boost the company's North American production capacity from 1.4 million to 1.6 million vehicles per year.

The U.S. plant is Tokyo-based Honda's sixth in a region that accounts for about half the company's annual global sales.

Honda sold 1.65 million units in North America last year, including Mexico and Canada, and forecasts sales to rise to 1.72 million units in the current year. Honda's current 1.4 million unit production capacity means the company has to import to meet demand.

The Japan plant will be in Saitama, outside Tokyo. The plant will cost $640 million, and will boost Honda's domestic production by 200,000 to a total 1.5 million vehicles a year. It will have 2,200 employees.

Worldwide, Honda sold 3.365 million units last year, and is forecasting sales to rise 9.7 percent to 3.693 million units in the current business year ending March 2007.

It is highly likely the new U.S. plant will be built near an existing one, and the new facility is expected to roll out such models as the Civic, and the Fit, a small, five-door model that the firm had been exporting from Japan, the Nihon Keizai newspaper said Tuesday in a report that did not identify sources.

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