Honda will build a $US100m plant in Argentina with annual capacity of 30,000 units.

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The automaker, which already has a plant in Brazil building such models as the Fit (Jazz) and Civic sedan, expects a workforce of 800 to start production in Argentina in the second half of 2009.


This will be a full production plant rather than a knock-down (CKD) kit assembly operation.


For the factory, Honda said it would buy new property in Buenos Aires province, where it already has a motorcycle plant. Processes in the new car plant would include stamping, welding, painting and final assembly, plus engine assembly.


The automaker said the Argentine vehicle market had recovered rapidly over the past few years die to increased economic stability. Sales rose 17% year on year to 450,000 units in 2006, compared with just 98,000 in 2002.

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Honda sales rose 50% to 7,300 last year.


“With continued market growth expected in Argentina, Honda will begin local automobile production to fulfil expanding market demand,” the automaker said.


“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 [there] along with the [plant] in Brazil.”