Honda picks Indiana to construct a $400 million assembly plant

Honda Motor Co. has chosen an Indiana town to construct a $ 400 million passenger-car assembly plant which would be its sixth assembly factory in North America.

This Japanese manufacturer of automobiles, trucks, motorcycles, and scooters had scheduled a press conference for today's morning in Greensburg, Ind., in the southeast corner of the state to declare that Indiana has been selected as the site for its new North American assembly plant.

Apart from Indiana, Illinois and Ohio had been the other finalists for the project. The project would create 1,500 jobs in a state that already has two other plants owned by foreign auto companies. Toyota manufactures pickup trucks and minivans at its factory in Princeton and Subaru makes cars at a facility in Lafayette, where it also intends to make Camrys for Toyota starting next year.

The new Honda plant is set to open in 2008, and will produce 200,000 cars annually. The plant is likely to manufacture the small Honda Civic, which the automaker already produces in East Liberty, Ohio.

With the two assembly plants in Ohio, which is also a home to research and development center, and one each in Ontario, Alabama and Mexico, the newest assembly plant will be Honda's sixth in North America.

Same as Honda's other American operations, it will be a non-union facility. It will give Honda the capacity to build 1.6 million vehicles per year in North America, up from current 1.4 million. Honda desires to boost sales 34%, to 4.5 million vehicles globally by 2010, with the U.S. accounting for 2 million of that.

Honda sales are up more than 8% this year compared with 2005, and it holds approximately 9% of the American market, ranking as the fifth-best-selling auto company. It is Japan's second-largest automaker, behind Toyota and ahead of Nissan.

"Honda's sales are up, its market share is up, and it's no surprise it needed more production capacity," said Jim Hossack, vice president of AutoPacific, an automotive research and consulting firm. "Is one more plant enough? It is for now," Hossack added.

However, Honda announced last month that it slated to build one more North American assembly plant, as well as another engine plant in Canada, and its first new factory in Japan since 1976.

Honda's decision follows Toyota search for places to build at least two new plants: one to produce vehicles, the other to build engines.