Honda to build new factory in Mexico

August 12, 2011 - 4:44 PM

DETROIT (AP) — Honda Motor Co. plans to build an $800 million factory in Mexico to make small cars for customers in North America, the company said Friday.

The plant, near Celaya, Guanajuato, north of Mexico City, is expected to open in 2014 and will employ 3,200 workers from the region, Honda said in a statement. It will make up to 200,000 subcompact cars and engines per year, the company said.

"With growing demand for fuel-efficient vehicles, this plant will increase Honda's ability to meet customer needs for subcompact vehicles from within North America," Tetsuo Iwamura, president of American Honda, said in a statement.

Honda now sells the subcompact Fit in North America, importing it to the U.S. from factories in Japan. The company would not say if it will build the Fit at the new factory, but said it tries to build vehicles in regions where they are sold.

The Fit is among the most popular subcompacts in the U.S., North America's largest market. Through July, Honda sold nearly 40,000 Fits in the U.S., according to Autodata Corp.

Honda also said Friday that it will restart a second shift at a factory in Marysville, Ohio, by the end of the year to build more Accord and Acura TL midsize cars. Second shifts also will be added in September and October at plants that make the Civic compact in Alliston, Ontario, and Greensburg, Indiana.

Honda's North American factories had been running at about half speed because of parts shortages due to plants damaged by the March earthquake and tsunami in Japan.

The company said the new plant in Mexico will be its eighth auto factory in North America, where it employs more than 33,000 people.