Honda is pushing ahead with plans to produce compact cars in Argentina as it looks to boost sales in South America.
Last year the company postponed the opening of a new factory in Buenos Aires amid growing concerns that the financial crisis could drag down car sales in Latin America.
However, sales in the region are recovering and are expected to continue to increase. The new plant will gave an initial annual capacity of 30,000 units. Honda already has a factory in Brazil and aims to export its cars to other countries in South America.
The US$100m plant was originally due to have opened earlier this year.
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