Honda has announced an aggressive investment programme that will see the construction of new assembly plants in Japan and the US, increased capacity in emerging markets, as well as a focus on developing advanced manufacturing and environmental technologies for next generation vehicles.
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Honda describes the investments as being designed to strengthen the core characteristics that make the automaker unique.
In Japan Honda will build an all-new plant in Yorii, Osato county, Saitama prefecture, 25 miles (35km) away from Sayama city, where Honda’s existing Saitama factory is located. The new plant will begin operation in 2010 with annual production capacity of approximately 200,000 engines and finished vehicles, which will be produced synchronously according to customer demand.
Investment in the plant is expected to be approximately 70 billion yen ($US640m), with construction due to start in a few years time. The plant will employ around 2,200 people.
“Honda will establish a high quality and highly efficient manufacturing system by applying the latest technologies,” said Honda Motor president & CEO Takeo Fukui. “The new plant will be responsible for evolving these manufacturing systems to other Honda operations across the world.”
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By GlobalDataThe plant will increase Honda’s capacity in Japan from 1.3m to 1.5m units. Honda’s two oldest plants date back to the 1960s and are also the largest – the Sayama plant has 520,000 units annual capacity and the Suzuka plant can produce around 540,000 vehicles a year. Honda has one other plant in Japan at the moment in Yokkaichi, Mie prefecture, with an annual capacity of 240,000 units.
Fukui said that after the new Yorii plant becomes operational, Honda will renovate the Sayama plant to make it the most advanced production operation.
Honda will also build a new R&D centre in Sakura, Tochigi. This new R&D facility will have multiple test courses, which reproduce various driving conditions including high-speed driving to urban-area driving. In this way, Honda will strengthen development of next-generation vehicles. Honda is aiming to begin operation of this new R&D facility in 2009. Related investment is expected to be approximately 17 billion yen.
Finally Honda will strengthen production capabilities at its Hamamatsu automatic transmission (AT) plant and develop advanced manufacturing technologies that can be rolled out to other plants in the future.
New assembly plant in US and engine plant in Canada
In the US Honda will build a new assembly plant with capacity of 200,000 units at an investment of US$400m. The plant is planned to become operational in 2008 and employ around 1,500 people. Honda is still in the process of selecting a location but Japanese sources yesterday suggested that Honda is seeking a site close to one of its existing three assembly plants in the US. The new plant will bring Honda’s assembly capacity in North American up from the current 1.4m units to 1.6m.
In addition Honda will build a new engine plant in Canada, in the neighbourhood of Honda’s assembly plant in Ontario, which it will supply. The annual production capacity will be approximately 200,000 units, and the plant should begin operation in 2008. Related investment is expected to be approximately US$140 million, with employment of 340 people.
At the moment the Ontario plant sources engines from the Anna engine plant in Ohio. Anna will supply the new US plant and will also produce some engine components that are currently sourced from Japan in an effort to increase local content. Presumably Honda will be taking steps to build engines at both plants in synchronicity with neighbouring vehicle assembly, at least to some degree, although Honda has not confirmed this.
The new automatic transmission plant in Georgia (with annual production capacity of more than 300,000 units) began operations this month (May 2006). With the addition of this plant, Honda will establish an integrated AT production capability and further improve production efficiency.
Outside of its main markets Honda is also aggressively building up capacity. In India Honda had originally planned to increase capacity to 100,000 units by 2010 but has now brought this forward to 2007. Honda said it will consider further expansion to accommodate future growth in customer demand.
It will also consider further expansion in China, where is will already have 530,000 units capacity by this autumn when Guangzhou Honda’s second plant goes into production.
Finally in Brazil, Honda announced it will double capacity to 100,000 units by 2008.
As a result of these announcements Honda’s total vehicle assembly capacity will have risen to more than 4.5m units worldwide by 2010.
Reducing environmental footprint
Honda said it will pursue more proactive efforts to reduce its environmental footprint with the main focus on CO2 reduction.
It said it is the first automaker to announce global C02 reduction goals for its products and plants.
In 2000, the global average of CO2 exhaust emissions among Honda automobiles was 179.5g/km. Despite increased sales of larger-size vehicles such as SUV and minivans, average CO2 emissions were reduced by 5% during the five year period up to 2005. Honda has announced that it will aim to achieve a further reduction of 5% or more, aiming to accomplish a total 10% reduction by 2010 compared to the level of 2000.
All-new hybrid vehicle
Fukui said that Honda is now developing a new dedicated hybrid vehicle suitable for family use in major automobile markets in the world. The new car will be launched in 2009 at a target price level lower than the Civic Hybrid. The new car will be produced at the Suzuka Factory at a rate of 200,000 units per year, based on a North American sales volume of 100,000 units.
New clean diesel
Honda is developing a cleaner next-generation four-cylinder diesel engine. This engine will meet the US EPA’s stringent Tier2 BIN5 emission standard requiring NOx emission levels equivalent to a petrol-powered vehicle. Honda plans to introduce this super-clean diesel engine to market within the next three years. Honda will also work toward development of a clean V6 diesel engine.
While improving the fuel efficiency of petrol engines with Advanced VTEC, Advanced VCM, and other technologies, Honda said it will expand the application of hybrid technology to smaller size vehicles and diesel technology to medium-to-large size vehicles.
Fuel Cell Vehicle
Finally Honda announced that it is developing a new vehicle based on the technology and design of the FCX Concept, and a drivable model will be unveiled in the autumn of this year. Honda plans to begin sales of this new fuel cell vehicle within the next three years.
