Honda Motor Company said today it will build an $800 million assembly plant in Mexico to produce subcompact vehicles for the Mexican and North American markets. Hit the jump to read the rest of the story.
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The Japanese automaker, in a statement, said the plant is scheduled to begin operation in 2014 with an annual capacity of 200,000 units.
Honda and other Japanese automakers are seeking to relocate car and truck production from Japan because the strength of the yen makes it difficult to make money on exports.
In addition to Honda, Mazda Motor Corp. and Nissan Motor Co. have announced plans for new or expanded plants and production in Mexico.
Hyundai Motor Corp. is also looking to add manufacturing capacity in North America, including Mexico, according to several recently published reports.
Honda didn’t identify the model to be assembled in Mexico, but the only subcompacts the automaker sells in the United States are the Fit, the CR-Z hybrid and the slightly larger Insight hybrid.
All three models are based on the same platform and now built in Japan.
The Mexico plant will provide Honda with a source of low-cost labor and components to offset the lower profit margins on subcompact models.
