Home Business Honda expands Indiana operation to soak up excess capacity in Celaya’s facility

Honda expands Indiana operation to soak up excess capacity in Celaya’s facility

by sanmigueltimes
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The Japanese carmaker will add production of the pint-sized utility vehicle to its plant in Guadalajara, Mexico, early next year on top of the output already coming from its plant in Celaya, Mexico, a Honda spokesman said last week.

That would put the HR-V into a plant that built about 63,000 CR-V compact crossovers last year. Honda will transfer production of the CR-V to its Greensburg, Ind., plant to clear the way for the HR-V.

Honda’s Celaya plant, which opened in 2014 to build the HR-V and the Fit hatchback on the same platform, churned out about 100,000 HR-Vs and about 44,000 Fits in 2015.

Tapping additional capacity at Guadalajara would boost output of the popular HR-V at a time when U.S. Honda dealers are clamoring for crossovers and SUVs.

U.S. sales of the HR-V, which hit American showrooms in May 2015, reached 29,876 in the first five months of this year. Through May, light trucks accounted for 58.7 percent of total U.S. sales.

The still-emerging subcompact crossover segment is among the fastest-growing. Segment sales surged 63 percent through May to 192,963 vehicles, with the HR-V in fourth place, trailing the Jeep Renegade, Subaru Crosstrek and Buick Encore.

Any extra volume could help American Honda Motor Co. build on the 5.7 percent U.S. sales gain it has notched through May. Sales of Acura and Honda brand vehicles rose to 653,640 units in the first five months, outpacing the market’s 1.1 percent increase.


Honda plant in Celaya

The Honda spokesman could not confirm exact production volumes for the HR-V at Guadalajara and Celaya. But the shuffle is part of a global realignment underway to soak up excess capacity.

Globally, Honda has enough factory firepower to build nearly a million more vehicles than it actually sells. Worldwide capacity stands at around 5.55 million vehicles, the spokesman noted. But the company sold 4.70 million in the last fiscal year.

Making better use of Honda’s production footprint has been a top priority of CEO Takahiro Hachigo. Because Honda had shifted so much production out of Japan in recent years, it failed to cash in on exports when the yen began to weaken.

In the next three to four years, Hachigo aims to boost annual output in Japan to around 950,000 vehicles, from around 730,000 last year. Up to 20 percent will be exported, compared with around 9 percent in 2015. Exporting Fits from Japan to the U.S., for example, frees capacity for more HR-Vs in Mexico.

Honda said in March it would invest $52 million to add the CR-V to Indiana next year. The plant currently makes the Civic.

Source: AutoNews

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