Honda Motor Co. will boost North American annual production capacity for Civic small cars by as many as 60,000 via rearranging assembly-plant operations, after running short of the model in the U.S.
The increase will be achieved by building Civics at a second Alliston, Ontario, plant starting in April, Honda said Monday. The annual rate will rise about 16 percent. To free up the capacity, Honda in February plans to begin shifting output of Pilot sport utility vehicles now at the Canadian factory to Lincoln, Ala.
“This underscores Honda's flexibility, that they can quickly shift production like this to meet demand,” said Michael Robinet, an analyst at consulting firm CSM Worldwide Inc. in Farmington Hills. “They're more likely to see bottlenecks at parts suppliers than in-house capacity bottlenecks from this kind of move.”
Honda blamed lack of availability of Civics for a 13 percent drop in U.S. sales of the cars last month. Civic sales increased 7.6 percent this year through September as U.S. gasoline prices reached $3 a gallon and consumer preferences shifted to smaller, fuel-efficient cars from models such as SUVs and pickup trucks.
David Iida, a Honda spokesman, declined to say how much the production changes will cost. The Tokyo-based company is fifth in U.S. sales and is Japan's third-largest automaker.
North American capacity for Civics would rise as high as about 440,000 a year. Honda now builds the cars in East Liberty, Ohio, and at another Alliston plant and is producing them at an annual rate of between 370,000 and 380,000 in the region, an increase from 320,000 in 2005.
More Civics than Accords
Honda with the increase probably will build more Civics in North America than Accord midsize cars, which have been the company's biggest seller in the U.S. for two decades. Honda produced 382,332 Accords in 2005. This year through September, output was 285,188 for the Accord and 284,933 for Civic.
The plan to increase small-car production is Honda's second this year. In June, the company said it would build a $550 million plant in Greensburg, Ind., that will be able to make as many as 200,000 small cars annually when it opens in 2008.
