TOKYO, Aug. 1 (Kyodo) — Honda Motor Co. is considering building a new plant in Mexico to make the Fit subcompact, which is currently exported to North America from Japan, company officials said Monday.
Honda may begin building the plant as soon as next year with the aim of starting production in 2014, the officials said. The automaker is narrowing down locations for the envisioned plant in Mexico, they said.
Honda, which already has a plant in Mexico with an annual output capability of 56,000 vehicles, aims to enhance profitability by boosting production there. Honda makes the CR-V sport utility vehicle at the existing plant.
The move to build a second plant in Mexico comes as the current strength of the yen reduces the profit on subcompacts exported from Japan, as small cars have low profit margins, according to the officials.
The automaker is focused on locating a plant to make the Fit subcompact for sale throughout North America in Mexico because under the North American free trade agreement, cars made in Mexico can be exported duty free to the United States and Canada.