Honda to increase SUV production in U.S. because of strong yen image

Honda Motor Co On Wednesday announced that will increase production of SUV’s in North America in a try to reduce the impact of strong yen.

Honda, who just unveiled its new 2012 CR-V SUV will invest $300 million in its Alabama plant in United States to increase production to 340,000 vehicles from 300,000, Nikkei said.

The announcement comes shortly after the Japanese automaker said that will add 140 jobs by 2013 in US, most of them at the Alabama plant.
The $1.5 billion facility has begun production of the Odyssey minivan, while the CR-V production is expected to start in 2012. According to Nikkei, the extra capacity at the Alabama plant will be used to make Acura MDX SUVs, which are made by the Canadian plant at present.

As expected, Honda will export a large part of its production to South Korea to help offset the strong yen and other market uncertainties. The strong yen was partly responsible for a 44% drop in Honda’s South Korean sales in January-October.

The strong yen has been a concern for many Japanese companies that earn a major portion of their revenues from abroad.

Toyota Motor on Tuesday announced that is considering building more plants in the United States mostly because of unfavorable strong yen and low demand for new vehicles in Japan.