Honda to Build $100 Million Car Plant in Argentina

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Researched by Industrial Info Resources (Sugar Land, Texas). Japan's Honda Motor Corporation (NYSE:HMC ) has announced through its subsidiary in Argentina, Honda Motor de Argentina S.A. (HAR), that $100 million will be invested in the South American country to open a plant geared for the production of compact passenger cars. This new factory in Argentina will be located in Buenos Aires province and will create over 800 jobs. It is part of the Japanese automotive company’s strategy to expand outside Japan in order to protect itself from currency fluctuations. Construction work will start in September 2007, and actual production is expected to start in 2009.

Stamping, welding and painting work, as well as final and engine assembly will be carried out at the plant, which is planned to produce 30,000 cars per year that will be commercialized, not only in the local, but also in other markets in the Latin American region. The carmaker’s investment is done at a time when the crisis resulting from power and gas cuts for industrial users is getting worse. The automobile market in Argentina has rapidly recovered over the past few years. In 2006, the market size reached approximately 17% more than the previous year with about 450,000 units. Honda sales are undergoing a favorable growth, having reached 7,300 units in 2006, which represents a 50% growth from a year earlier.

This new plant will play an important role in Honda’s network production in South America and its continued market growth expected in Argentina.

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