New U.S. plant for Honda?

At at time when U.S. auto makers are trimming back production, Honda looks set to build another North American plant. According to today’s Nihon Keizai Shimbun, Japan’s leading business daily, Honda plans to open a new North American plant in 2009, which will initially churn out 150,000 Civics and Fit compacts. The Nikkei says capacity could eventually reach 300,000 and help take Honda’s total North American output close to 1.8 million vehicles a year—roughly the same as Toyota. The report doesn’t say where Honda will build the new plant other than that it will likely be near one of its existing facilities. Honda currently has plants in Ohio, Alabama, Ontario, and Jalisco in Mexico. Let the bidding commence.

Honda could certainly benefit from another plant in North America. Sales last year rose 6% to 1.66 million—roughly half its total global auto sales—whereas local production was 1.4 million units. This year, Honda has continued to outpace most rivals—sales were up 6.5% in the U.S. in April. A new plant would also help it close the output gap on Toyota which produces about 1.8 million vehicles annually in North America. Still, don’t expect Toyota to stand still. It’s opening a new 200,000 unit plant in Texas later this year and will open a second 150,000 unit Canadian plant in 2008 to meet surging demand of its own.

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