Honda de Mexico, S.A. de C.V. (HDM) has announced that construction of a new Honda transmission plant in Celaya, near the City of Guanajuato, Mexico, has begun. The new plant will be located adjacent to the company’s new automobile plant that will begin mass production early next year of the new 2015 Honda Fit.
With an initial investment of US$470 million, the transmission plant will begin producing continuously variable transmissions (CVTs) in the second half of 2015 with an initial annual production capacity of 350,000 units. Honda plans to more than double annual output of CVTs produced in Celaya to approximately 700,000 annually in the coming years, when employment is expected to reach 1,500. In addition to supporting HDM auto production, the plant will provide transmissions to Honda auto plants outside Mexico.
“Our ability to begin operations would be impossible without the enthusiasm and support of the community, and I want to thank the state and federal governments for their efforts to help ensure the success of our operations,” said Tetsuo Iwamura, COO of Honda North American Regional Operations. “With the growing skills of our new associates in Mexico we are establishing a new production base that will achieve outstanding global competitiveness.”
By establishing a production base for CVT manufacturing in the same location as the new $800 million automobile plant, Honda de Mexico will operate a highly efficient production structure that maximizes local content in Mexico, the rest of North America and globally. Honda will employ approximately 4,700 associates in Celaya when the auto, engine and transmission plants are in full operation.
The new transmission plant in Mexico will join existing Honda transmission manufacturing operations in Ohio and Georgia, increasing Honda’s annual transmission production capacity in North America from the current 1.375 million units to more than 1.7 million units in 2016, and to more than 2 million units when the Mexican plant reaches full capacity.
Honda established its first Mexican manufacturing operations in September 1985. Two years later, Honda de Mexico started motorcycle import sales and, in March 1988, began production of motorcycle products and automobile service parts in El Salto, Jalisco. Automobile production began in 1995 with the Accord and, in 2007, production switched to the CR-V. The auto plant in El Salto has an annual capacity to produce 63,000 automobiles.
With the new 200,000-unit Celaya automobile plant scheduled to begin operation early next year, Honda de Mexico’s annual production capacity will increase to a total of 263,000 units. In 2012, Honda sold 54,000 units in Mexico (up more than 150% from 2011), with sales volume steadily increasing.
In the last three years, Honda has announced investments in North America totaling nearly $2.7 billion for the innovation and expansion of its operations, including $1.27 billion for the new plants in Celaya.