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Honda building new mini-vehicle plant in Japan

A Honda subsidiary is building a new plant in Japan to build mini-vehicles as soaring gas prices boosts demand for the cheap, fuel-efficient tiny cars.

business Updated: Mar 11, 2008 13:50 IST

A Honda subsidiary is building a new plant in Japan to build mini-vehicles, the Japanese automaker said on Tuesday, as soaring gas prices boosts demand for the cheap, fuel-efficient tiny cars.

Yachiyo Industry Co Ltd, a subsidiary of Honda Motor Co, will build a new plant in Mie prefecture, southwest of Nagoya, in central Japan, with engine production set to start in 2009, and auto production a year later, the Tokyo-based company said in a statement.

Production capacity, when combined with an older nearby plant, will total 240,000 a year, and the new plant will make mini-vehicles such as Life and Zest models, Honda said.

The new plant is part of Honda's effort to strengthen its mini-vehicle business, it said.

Known as "kei," or light, vehicles in Japanese, minicars are limited to an engine size of up to 660 cubic centimeters, and restricted in size by law. They have been popular for years in Japan, and demand has been picking up abroad.