03/28/2012 - CELAYA, Mexico

Honda de Mexico, S.A. de C.V. (HDM) laid the foundation stone for the construction of its new vehicle production plant in Celaya, Guanajuato at an event attended by Felipe Calderon Hinojosa, president of Mexico and Takanobu Ito, president & CEO of Honda Motor Co., Ltd. The plant will begin operation in 2014 with production of the Honda Fit subcompact model.

With this new facility in Mexico, Honda continues to advance its commitment to invest and grow its operations in North America. With growing demand for fuel-efficient vehicles, the new plant will increase Honda's ability to meet customer needs for subcompact vehicles from within North America.

Expected to employ approximately 3,200 associates at its full annual capacity of 200,000 units, the new Honda de Mexico plant in Celaya will produce the Honda Fit subcompact model both for the Mexican market and for the U.S. and Canadian markets, as well as other regions.

"Considering the needs of the Mexican market, which is expecting continued growth in the future, and also serving as a global production base for the North American region and beyond, we decided to make the Fit the first product to be produced here," Ito said.

Also, we will create a highly efficient production system that allows us to provide high quality products at an affordable price both by expanding the use of local parts and by utilizing global parts sourcing," he said.

The new plant will occupy 5.66 million-square meters near Celaya, Guanajuato, about 210 miles east of two existing HDM plants in El Salto, Jalisco, which build automobiles, motorcycles and auto parts.

The Celaya plant will apply Honda's advanced and highly efficient manufacturing system to produce both vehicles and engines. The new Honda plant will be the company's eighth auto plant – and its 10th auto assembly line – in North America. The new plant will boost Honda's capital investment in its North American operations to nearly US$21 billion.

Honda employs more than 33,000 associates in North America. Production operations related to automobiles include four auto plants, two auto engine production facilities and two transmission plants in the United States. In addition, Honda has two auto plants and an auto engine plant in Canada, and an auto plant in El Salto.

The new plant in Mexico will increase Honda's automobile production capacity in North America from 1.63 million units to 1.87 million in spring 2014. In 2011, more than 85 percent of the Honda and Acura cars and light trucks sold in the U.S. were produced in North America. In addition to region-specific models, including the Honda Odyssey, Pilot and Ridgeline, and the Acura TL, MDX and RDX, Honda produces key global models such as the Honda Civic, Accord and CR-V in North America. The addition of Fit production in Mexico means Honda will produce all four of its global models in North America.

Emphasizing Honda's commitment to environmental responsibility, 13 of Honda's 14 North American manufacturing plants operating in North America meet the ISO 14001 international environmental management standard.

About Honda De Mexico
HDM was established in September 1985, and began sales of motorcycle products in 1987. In March 1988, HDM started production of motorcycle products and automobile service parts in El Salto, Jalisco. An adjacent auto production plant opened in 1995 with production of the Honda Accord, switching to production of the Honda CR-V in 2007. HDM's current annual auto production capacity is 60,000 units.

About Honda in North America
Based on Honda's longstanding commitment to "build products close to the customer" Honda currently operates 14 manufacturing facilities in North America, producing a wide range of Honda and Acura automobiles, automobile engines and automatic transmissions, Honda all-terrain vehicles, and Honda power equipment products such as lawn mowers, mini-tillers and general purpose engines, using domestic and globally sourced parts.
Honda started local production in the U.S. with motorcycles in 1979. In 1982, Honda became the first Japanese automaker to produce passenger cars in the U.S. Honda has continued to expand its local production capabilities, and cumulative automobile production in North America surpassed 23 million units in 2011.

honda ceo takanobu ito has conceded that the company he took over in mid-2009 may have let down its guard during the previous decade of rapid expansion, while pulling back on vehicle development too much after the global financial crisis.

Ito unveiled the technologies before last year's Tokyo Motor Show. The 1st U.S. car with the new powertrain, a direct-injection engine mated to a newly developed continuously variable transmission, will be the redesigned Accord.

Previously we allocated between 600 to 800 people for Formula 1 racing.

Honda is limiting exports to the U.S. of some Japan-made cars because it's losing money on them, Honda CFO Fumihiko Ike told Automotive News.

The weekly trade journal reports Ike's comments today and says this is the first admission by a Japanese car company that it's losing money on exports to the U.S. The issue is the dollar's weakness vs. the yen, which cuts the value of a U.S. sale.

"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Ike told Automotive News. "Definitely, the absolute number of exports to the United States will be decreasing."

The exchange issue is why foreign automakers, including Honda, have aggressively expanded production plants in the U.S. in recent years, as well as other operations, from design studios to proving grounds. Vehicles built where they are sold escape the foreign-exchange trap, because the costs and sales revenue are in the same currency.

Honda already makes almost 90% of the vehicles it sells here at North American plants. It's building another one in Mexico and expanding production in other U.S. factories.

U.S.-market Hondas made in Japan and possibly in low supply include the Fit subcompact, Insight hybrid, CR-Z hybrid, Civic hybrid and Acura TSX.

Ike told AN that Honda will move more hybrid production to North America "within a few years."

Toyota and Nissan wouldn't say if they, too, lose money on cars shipped to the U.S., but both noted they are shifting production to North America.

"We're focused on localizing," producing here 85% of vehicles sold here by the end of next year, up from 70%, said Nissan's U.S. spokesman, David Reuter. The Rogue SUV, for example, now is made in Japan but will be built at Smyrna, Tenn., next summer.

Toyota builds in North America 72.5% of the vehicles it sells here. "Our executives say we don't want knee-jerk reactions, but the long-term goal is to build them where we sell them," said U.S. spokesman Mike Michels. "That insulates us to a greater extent" from currency issues.

Honda will continue to ship some money-losers to the U.S. because, "We need to keep our customer base," Ike told AN, and "for the sake of our dealers. At least they have something."

Honda's U.S. officials hinted at the problem recently in explaining low sales of the redone Insight hybrid, saying it was due to fewer to sell, not low appeal. There are more profitable markets elsewhere for Insight, Honda said.

You’re going to find that Accord is a very well-balanced product that is the best overall product in everything, whether we’re talking about interior packaging, content of the vehicle, the fuel economy of the vehicle,

“I know that there is a particularly high expectation for Honda to get back that magic it had at 1 time,” said Berkman, 53, in an interview last month at his new domain, the vast R&D center in Raymond, Ohio. “What are we going to do, complain that expectations are too high for us? That we want low expectations? That’s not right.”