Honda Opens Plant its First Japan in 50 Years image

Honda plans to open a plant in Japan, almost 50 years since it opened its last facility in the country.

In 1964, when Japan was preparing to host the Olympic Games, Honda inaugurated its facility in Sayama, near Tokyo. The automaker’s three plants in Japan were enough for Honda to deal with domestic demand and since asset prices collapsed in the early 1990s, there was no need for expansion.

Now that the weaker yen makes Japanese automakers more profitable, Honda is opening a new plant in Japan, which will have an initial annual capacity of 250,000 vehicles. Over the past month investors have turned their attention back to Japan, making the stocks reach levels last time seen in 2008. Analysts also predict that the country’s economy will emerge from recession this quarter.

The Yorii plant “is very important because big companies have high multiplier effects and will lead to many jobs,” said Jesper Koll, head of Japanese equity research at JPMorgan Chase & Co. in Tokyo.

Honda said that the Yorii plant will use more efficient technology and will help the automaker consolidate production of compact vehicles such as the Fit, which is Honda’s best-selling vehicle in Japan.