Honda to build new plant in Argentina

Honda Motor de Argentina S A (HAR), a Honda subsidiary in Argentina, announced that it has decided to build a new automobile plant and begin local production in Argentina.

HAR will acquire new property in Buenos Aires province for the construction of a new automobile production plant with processes to include stamping, welding, painting, and final assembly as well as engine assembly.

The company is targeting the production start-up of this new plant in the latter half of 2009, with an annual production capacity of 30,000 units. The total investment related to the establishment of the new plant is expected to be approximately US$100 million. The company is planning to hire 800 new associates.

Due to increased economic stability, the automobile market in Argentina has been rapidly recovering over the past few years. In 2006, the market size reached approximately 450,000 units (up 17 per cent from a year earlier), a substantial increase compared to the market size of approximately 98,000 units in 2002.

Honda sales are undergoing a favourable growth, having reached 7,300 units in 2006 - up 50 per cent from a year earlier. With continued market growth expected in Argentina, Honda will begin local automobile production to fulfill expanding market demand.

Moreover, the new plant will begin exporting products to other countries in the South America region and play a key role in Honda''s production network in South America along with the Honda auto plant in Brazil.