17 May 2006
Honda announced a $1.18 billion expansion plan to meet the growing demand for its cars. The plan, announced by Honda president and CEO Takeo Fukui in his 2006 mid-year speech, identified three focus areas:
- Strengthening production and R&D capabilities in Japan,
- Increasing production capacity oversees, including the USA, Canada, and Asia, and
- Strengthening the commitment to reduce environmental footprint, with the main focus on CO2 emissions reduction.
In Japan, Honda plans to build a new auto plant capable of synchronous auto production—from the engine to the entire automobile—in Yorii, Saitama. Honda will also build a new R&D center in Sakura, Tochigi, and expand existing production plants.
The plan for overseas growth calls for a new auto plant in the USA, to become operational in 2008. A new engine plant will be build in Canada, neighboring the existing auto plant in Alliston, ON. Furthermore, expansion is planned for motorcycle production in India, Philippines, and Pakistan, as well as for automobile production in India, China, and Brazil.
Based on the expansion plans, Honda envisions 2010 global unit sales of more than 4.5 million units for automobiles, 18 million units for motorcycles, and 7 million units for power products.
Honda voluntarily set global CO2 reduction goals for its products and production activities. In 2000, the global average of CO2 exhaust emissions from Honda automobiles was 179.5 g/km. Despite increased sales of larger-size vehicles such as SUV and minivans, average CO2 emissions were reduced by 5% from 2000 to 2005, said Honda. A further 5% CO2 emission reduction is targeted from 2006 to 2010.
The product strategy to achieve the CO2 emission targets includes a new dedicated hybrid vehicle, and new clean diesel cars. The new, more affordable hybrid will be launched in 2009 and offered at a price level lower than the Civic Hybrid. The projected annual worldwide sales are 200,000 units, including 100,000 units in North America.
Honda will expand the application of diesel technology to medium-to-large size vehicles. Based on the diesel engine currently sold in Europe, Honda is developing a cleaner next-generation 4-cylinder diesel engine, which will meet the US EPA’s Tier 2 Bin 5 emission standards. Honda plans to introduce this super-clean diesel engine to the market within the next three years. Honda will also work toward development of a clean V6 diesel engine.