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Honda to Build $800 million Plant in Mexico by 2014

13 September, 2012

Reuters reported Friday that
Honda will build a car plant in Mexico's central state of Guanajuato that is
scheduled to open by 2014,showing a continued high level of confidence in the
ability of Mexican workers and the safety of the country among international
automakers. The new assembly plant is expected to help the car company control
costs and meet the growing demand for small cars.

Honda's new $800 million facility
will be the second major investment in Mexico by a Japanese automaker in the
past several months,a scenario that has come about due to Japan's strong yen,
uncertain energy supply and disruption to manufacture and shipping of auto
parts following the devastating earthquakes the country endured earlier this
year. The new plant will open with the capacity to produce at least 200,000
vehicles annually and will employ more than 3,200 workers in the same region
where Mazda Motor Corp is also planning to build a new plant.

Mirko Mikelic,senior portfolio
manager with Fifth Third Asset Management,told Reuters,“It is a global
industry and obviously North America is still an extremely important market not
only to the domestic automakers but Honda and Toyota. There are still a lot of
vehicles being sold in the United States and obviously some of the cheapest
places to make parts or assemble vehicles is south of the border.”

Honda's new plant in Mexico will also help meet growing demand for
fuel-efficient vehicles made in the region for all of North America,said
Honda's American president,Tetsuo Iwamura. Thanks to the new plant,which will
be the company's eighth in North America,the automaker's production in the
region will rise from 1.63 million to 1.83 million by 2014,clearly
demonstrating Honda's confidence in Mexico as a manufacturing and distribution
hub for its most important new offerings.

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