Sun, Mar 12, 2006 - Page 11 News List

Honda plans first factory in Japan after 30 years

AFP , TOKYO

Third-ranked Japanese automaker Honda Motor plans to build a new major factory in Japan for the first time in 30 years, amid a Japanese economic recovery, a news report said yesterday.

The site will initially make advanced fuel-efficient engines by as early as 2008, and may possibly assemble finished vehicles in the future, the Nihon Keizai Shimbun said, without citing sources.

The plant is slated for Saitama prefecture, just north of Tokyo, with the initial investment estimated at ?30 billion (US$252.16 million), including the cost for land, the newspaper said.

At full capacity, the plant is expected to crank out around 200,000 engines a year, the newspaper said.

Amid predictions that fuel-efficient engines and hybrid vehicles will spread rapidly, Honda sees the need not only to engage in technological development, but also to accumulate expertise in mass production, the Nihon Keizai reported.

This led to its plan to spend huge sums to construct a domestic plant, it said.

Honda officials could not be reached for immediate comment.

The last time the firm built a domestic mass-production factory was in Kumamoto prefecture in 1976, it said.

Under the plan, the factory would be the third largest plant in Japan, the newspaper said.

Honda plans to first set up production lines for its new VTEC engine, which features both low fuel-consumption and high power, and for V-10 engines geared for high-end sports cars, the Nihon Keizai said.

The automaker is also considering setting up a production line there for hybrid systems powered by gasoline-fueled engines and electric motors, it said.

The firm is also considering assembling finished cars in the future, the paper said.

Honda plans to keep operating its existing facilities even after the new plant is completed, the paper said.

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