Honda to invest $24mln to lift Vietnam bike output http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-05T054427Z_01_T227580_RTRIDST_0_AUTOS-HONDA-VIETNAM.XML&rpc=66&type=qcna
Thu Oct 5, 2006
TOKYO, Oct 5 (Reuters) - Japan's Honda Motor Co. (7267.T: Quote, NEWS, Research) said on Thursday it plans to invest about $24 million to bring its annual motorcycle production in Vietnam to 1 million units, from the current 860,000, to keep pace with a growing demand by the middle-class customers there.
Honda, Japan's third-biggest car maker and the world's top motorcycle maker, said it will add one more production line by early next year in its only motorcycle plant in Vietnam, creating 400 news jobs.
Honda has 32 motorcycle plants in 21 countries.
"The demand for motorcycles is growing exponentially in the Southeast Asia and the BRICs," said Honda spokesman Shigeki Endo, referring to the fast-growing economies of Brazil, Russia, India and China.
"More people can afford to buy motorcycles now, and it's not uncommon that one family owns three or four."
Honda currently has the global sales of 15.8 million motorcycles per year and is likely to bring the number up to 18 million units by 2010, Endo said. Honda produces the most in India, with output capacity of 4.9 million units, followed by 3 million in Indonesia, according to the company. Endo said the company plans to add one more plant in India next year and to beef up its production capacity in Brazil, without giving details. The company's sales are increasing by 1 million units every year, he added.
He said its competitors include Yamaha Motor Co. (7272.T: Quote, NEWS, Research) and Suzuki Motor Corp. (7269.T: Quote, NEWS, Research), and it is now also competing with Taiwanese and Chinese makers.
Shares in Honda rose 1.5 percent to 4,110 yen as of 0518 GMT. The benchmark Nikkei average <.N225> was up 2.29 percent.
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