Honda to Expand in US To Counter Yen's Strength

THE Honda Motor Company has scheduled a news conference later today to announce the significant expansion of its North American production operations.

The move could help Honda counter the crippling impact of the rising yen; however, company officials say they are developing a long-term strategy that won't shift with the exchange rate.

Honda was the first of the Japanese nameplates to erect an American assembly plant, and it now builds cars in Ohio and Ontario. The plants' capacity could grow from 600,000 passenger cars a year to nearly 1 million by the end of the century.

While details of the expansion are closely guarded, it appears that Honda will double the size of its Civic plant in East Liberty, Ohio. The company may also expand capacity at one of its other two assembly plants or even build an entirely new plant.

Civic production will be increased, and Honda will begin building a new line of luxury cars in the United States; the vehicles will be marketed through the upscale Acura division.

Later this year, Honda will introduce its first minivan, based on the same platform as the popular Accord sedan. The minivan initially will be imported from Japan, but Tom Elliott, Honda's top American executive, said recently that production may shift to the US by the end of the decade.

The expansion program will make Honda less vulnerable to the fast-rising yen, which has risen from 265 to the dollar in 1985 to 98 today. That has forced a steady increase in prices, making the average 1994 Honda $1,000 to $3,000 more than a comparable Big Three product. But Honda officials stress that they will follow through on their plans even if the dollar regains strength.

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