Honda to Expand Further

Honda Motor Company's announcement on its plans for a major expansion of its global production operations with new plants in Thailand, Vietnam, India and Argentina in order to meet growing demand outside Japan was made on Wednesday.

Furthermore, the Japanese car maker unveiled its plans for a $246-million research and development center in China. The center is aimed at designing a new vehicle with its joint venture partner in China specifically for the Chinese market to begin going on sale from 2010.

In Thailand Honda said that it had already begun construction of a second auto facility in Ayutthaya Province at a cost of almost $200 million that is set to start up in the second half of 2008 and eventually double its production in the country to 240 000 vehicles per year.

Moreover, Honda started work on a second facility in the sub urban areas of Hanoi with an investment of $65 million. The factory is intended to produce 500 000 motorcycles per year from the second half of 2008, thereby raising its annual production capacity in the site to 1.5 million units.

The Japanese automaker also approved plans that were first announced in January for a second auto facility in India with an investment of almost $230 million that is set to start up in late 2009 and produce about 60 000 vehicles per year.

To suffice the growing demand for vehicles in South America, Honda plans to spend $100-million on a new automobile production plant in Argentina.

To be constructed in Buenos Aires province, the facility is set to start up in 2009 with an annual production capacity of 300 000 compact passenger vehicles.

Have you ever wondered why we always see and here in the news that Japanese automakers have been ramping up their global production facilities? The answer is that they keep pace with strenuous demand for their vehicles overseas. They also do this to take advantage of lower labor costs outside of Japan - a wise move. Now you know.

Honda Motor has enjoyed several years of record profits. However, its earnings declined a bit in the last financial year up to March all along tough competition in its home market and higher costs of raw materials.

Other than vehicles, Honda facilities also build Honda fuel injector in order to assure that the cars are supplied with the appropriate amount of fuel for diverse drive applications.