Honda Motor Co. Ltd. announced plans to construct a new US vehicle assembly plant in the Midwestern state of Indiana, part of a major expansion announced in May. The 550-million-dollar plant will be located near Greensburg, Indiana, fifty miles (80 kilometers) southeast of the state capital Indianapolis.
The plant will build four-cylinder powered vehicles beginning in 2008, with total production capacity of 200,000 units annually. It will employ 2,000 workers.
The Japanese automaker said it had selected the location because of its close proximity to an existing supply base feeding a number of auto assembly and component plants currently in the Midwestern state, including those of Toyota, General Motors, Ford and Chrysler.
"We look forward to crossing the finish line together," Koichi Kondo, Honda's North American president and chief executive, told reporters during a conference call.
"I look forward to saying, Honda and Indiana, start your engines."
The state of Indiana provided nearly 40 million dollars in financial incentives to the Japanese automaker, along with another 45 million dollars in promised infrastructure improvements to provide utilities and upgrade access to the plant.
Honda plans to use the latest in flexible manufacturing tooling at the plant, which will become its sixth North American assembly plant, allowing the plant to build multiple models with little time required for changeovers.
This latest announcement is a key piece of Honda's plans to invest 1.46 billion dollars in new facilities worldwide and will boost its global manufacturing capacity to 4.5 million cars by 2010.
Honda is the number-two best-selling carmaker in the United States, the world's biggest automotive market. In May, Honda had 8.9 percent of the US market, leader Toyota had 14.6 percent and Nissan came in third with 6.4 percent, according to Autodata figures.
In 2005, American Honda posted record US sales of 1.462 million new Honda and Acura cars and light trucks, the ninth straight year of record annual sales.
Nearly eight of 10 Honda and Acura vehicles sold in the US are produced in North America.
Honda said the Indiana factory will help boost its total North American auto production capacity to more than 1.6 million units in 2008 from a current 1.4 million units and expand its workforce to more than 37,000 employees.
With this latest project, capital investment in North America will exceed nine billion dollars, it said.
Honda said it would make a significant commitment to limit the environmental impact of the new Indiana plant.
"Our goal is that this plant in Indiana will have the smallest environmental footprint of any Honda auto plant in North America," said Akio Hamada, president of Honda of America Manufacturing Inc.
Honda first announced its plan to build a new auto plant as part of its May 17 announcement for the advancement of the company's "2010 Vision" for North American automobile operations.
Honda began operations in the US in 1959, establishing its first overseas subsidiary. Production operations were launched in 1979.
