Japan's Honda Motor Co says it plans to build an $800-million factory in Mexico for manufacturing fuel-efficient sub compact vehicles for the Mexican and North American markets.
Honda auto sales in Mexico have been growing steadily with increasing market demand in Mexico. In 2010, sales of Honda and Acura brand automobiles reached approximately 40,000 units in Mexico - an increase of 7 per cent from the previous year.
The new plant in Mexico will increase Honda's automobile production capacity in North America from the current 1.63 million units to 1.83 million units in 2014. In 2010, more than 87 per cent of Honda and Acura cars and light trucks sold in America were produced in North America.
"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.
The plant is expected to open in 2014 and will employ approximately 3,200 workers from the region, Honda said in a statement.
The plant will occupy a 5.66 million square meters site in a suburb of Celaya, in Mexico's Guanajuato, about 210 miles east of two existing plants in El Salto, Jalisco, which build automobiles, motorcycles and auto parts, the company said.