News Room - Business/Economics

Posted on 04 Dec 2008

Honda cutting down overseas expansion plans

Honda Motor Co is scaling back its overseas expansion plans, freezing a project to boost capacity in Turkey and delaying a second plant in India by at least a year, the Nikkei business daily reported.

 

“We’ll be forced to sharply reduce capital investment next fiscal year,” an unidentified Honda official was quoted as saying.

 

Japan’s number two automaker had planned to spend 710 billion yen (US$7.6bil) on capital projects this year.

A worker assembles the door of a Honda Civic at the Honda assembly plant in Greensburg, Indiana. — AP

 

Honda also now plans to produce 100,000 cars at its new plant in the US state of Indiana in the year starting April 1 instead of the 200,000 originally planned, the Nikkei said. The plant came on stream in October.

 

Honda, which has said it will have a tough time meeting its lowered annual profit forecasts, has scrapped a plan to increase capacity at its factory in Turkey by about 26% to 63,000 units, the Nikkei said.

 

The plant produces the Civic and other small cars for export to Russia, where sales have stalled.

 

The upgrade was to be have been completed by the middle of next year. In addition, the scheduled 2010 launch of Honda’s second Indian plant, designed to churn out 60,000 vehicles a year, will be put off until 2011 or later, the Nikkei said.