Honda is returning to its roots as it builds a $550 million plant designed to crank out vehicles equipped with four-cylinder engines.
The plant, in southeast Indiana, will be flexible enough to add models later.
“Four cylinders – that's where we established ourselves and how we grew as a company. And environmentally, we think it's the right thing to do,” said Dick Colliver, executive vice president for Honda and Acura sales at American Honda Motor Co.
The Indiana site is about 100 miles from Honda's engine plant in Anna, Ohio. The Anna plant will supply four-cylinder engines to the new plant near Greensburg, Ind. Production there begins in the fall of 2008.
Honda needs the additional 200,000 units a year to keep up with demand. In 2005, American Honda achieved record U.S. sales of 1,462,472 new Honda and Acura light vehicles. That was the ninth straight year of record sales.
“We see the trend in the marketplace. You can go to the domestics, you can go anywhere else – the bloom is off the rose on big engines,” Colliver said during a Wednesday, June 28, teleconference. “People are starting to understand what the price of gasoline is doing to disposable income, and we don't see that changing in the near future.”
Honda announced its plan to build an auto plant May 17. The company also plans to build a $140 million engine plant in Alliston, Ontario, that will produce four-cylinder engines starting in 2008.
