Honda Expands Production

Elena
17 May, 2006
New York City

The company also plans to build a new assembly factory in Japan and an engine plant in Canada. The three plants are aimed at meeting 34% increase in annual sales to 4.5 million vehicles a year by 2010. In addition to the new plants, the company will double vehicle production at its plant in Brazil to 100,000 units by 2008, and double output in India to 100,000 by 2007.

[R]8:00AM Honda Motor plans to further expand car production in North America.[/R]
Honda Motor Co. announced plans to build a new plant in the United States in order to meet growing demand for its cars. The construction of a new assembly factory in Japan and an engine plant in Canada is also part of the $1.18 billion expansion plan. The three plants are aimed at meeting 34% increase in annual sales to 4.5 million vehicles a year by 2010. In addition to the new plants, the company will double vehicle production at its plant in Brazil to 100,000 units by 2008, and double output in India to 100,000 by 2007.

Honda already has two plants in Ohio, a factory in Alabama, and a plant each in Canada and Mexico.The sixth car factory in North America, worth $400 million, would employ 1,500 workers and produce about 200,000 vehicles a year when it was completed in 2008. Honda President said that a location for the plant hadn’t been selected yet but the company was in the final stage of finding one. The new plant would boost the company's North American production capacity from 1.4 million to 1.6 million vehicles. Information on what vehicles the new U.S. plant would produce was not officially released, but most likely the new facility will roll out models as the Civic, and the Fit, a small, five-door model that had been exported from Japan. Honda will also start designing a cleaner next-generation four-cylinder diesel engine that will produce less noise. It envisions selling the new super-clean engines within the next three years.

Last month, the company reported a record quarterly profit of 219.5 billion yen ($1.9 billion) in the first quarter, more than double its income from a year ago. Honda's shares, which have risen about 14% in 2006, gained 0.78% in Tokyo trading.


[R]7:30 AM Asian markets rebound following U.S data and investors rally.[/R]
Asian markets closed higher. Japan''s Nikkei index advanced 0.2%, breaking six consecutive session of losses to close at 16,307.67. U.S. producer price index data showed that energy prices have not impacted inflation as it had been expected. Less inflation translates as less pressure on the dollar which is good news for exporters. Industrial and machinery stocks led the gainers in Tokyo Wednesday. Shikawajima-Harima Heavy Industries advanced 3.23%, and Mitsubishi Heavy Industries gained 4.1%. Exporters were also among the top performers. Nikon advanced 6.26%, Konica Minolta gained 1.95% and Canon was up 1.23%. Automotive stocks also advanced. Toyota Motor was traded 1.13% higher and Honda Motor rose 0.78% in the wake of its proposed plans to spend $1.2 billion on the construction of new factories in Canada. Hang Seng''s top stock, HSBC Holdings, also advanced 2.91% while chip-maker Hynix Semiconductor of South Korea was up 5.18%. Samsung Electronics advanced as much as 1.87%. Singapore''s Straits Times Index rose 1.39%, and Taiwan''s Weighted Average advanced 0.66%.


[R]6:30 AM Early European trade gains on earnings and mining stocks.[/R]
European markets traded higher Wednesday morning as equity markets gained on strong advances in Asia, the optimistic earnings reports and upbeat mining stocks. Vivendi, the French media group, continued repel moves at breaking up the company, releasing robust earnings outlook. Its shares were up 4.9%.London-listed miners also gained. Antofagasta advanced 3.2%, while BHP Billiton rose 1.9%. Tesco, the UK’s retailer, advanced 1.1%, while France’s Credit Agricole lost 0.8%.

Light crude oil gained 19 cents at $69.72 a barrel by 0713 GMT after gaining a humble 12 cents on Tuesday. London Brent for July delivery advanced 20 cents at $70.28. Gold for June delivery rose $19.80 to $712.70 an ounce, thanks to stronger-than-expected open on the Tokyo Commodity Exchange. The euro was traded at $1.2863, up from $1.2853 in New York late Tuesday, while the British pound advanced to $1.8908 from $1.8876. The dollar bought 109.17 yen.