Representing a $400 million investment, the new plant will be built on a 1,350-acre tract 40 miles east of Birmingham and will employ approximately 1,500 associates when it reaches its twin annual capacities of 120,000 vehicles and 120,000 engines.
Scheduled to begin production in 2002, the new plant will increase Honda's capital investment in the US to more than $4.8 billion, increase US employment to nearly 20,000 associates and bring to eleven the number of major Honda manufacturing plants in North America. Honda's plan to add the Alabama facility to its existing four auto and engine manufacturing operations in Ohio and Ontario, Canada will enable Honda to:

• Boost total North American auto production capacity to 1.13 million units by 2003.
• Offer a full range of vehicles in North America from small cars to light trucks.
• Meet overwhelming demand in North America for Honda and Acura products.

"Honda's strong commitment to America is based on the success of our existing US operations and strong demand from our customers, but this demand has stretched our production to the limit," said Koichi Amemiya, president of American Honda and chief operating officer of Honda's Americas Region. "The state of Alabama has what we need to continue this success - an outstanding community of people, excellent transportation systems and the necessary infrastructure to support industry."

"This is a great day for the people of Alabama," said Alabama Governor Don Siegelman. "Honda is investing in Alabama and Alabama is investing our future in Honda. Honda brings to Alabama a prestige and worldwide reputation that honors us. And in Alabama, Honda will find a perfect climate, abundant natural resources and the greatest people in the world. We will produce the finest products in your company's history."

The construction of the 1.7 million square foot facility will begin in mid-2000 and will be finished by spring 2002. After the completion of the unique engine-vehicle manufacturing plant, Honda will immediately begin production with a plan to reach full capacity on two shifts within one year -- in spring 2003. The new plant also will be an environmentally advanced operation. Every major Honda plant in America and worldwide has met the strict ISO 14001 international environmental management standards. The Alabama plant will employ advanced methods of energy and emission reduction.

"Even with this expansion Honda will continue to make the most efficient use of its manufacturing investment in North America," said Koki Hirashima, head of Honda's manufacturing operations in the Americas Region. "These new plants are necessary to meet customer demand, but we will employ advanced technologies to make them highly efficient from the standpoint of production and environmental responsibility." As part of an infrastructure improvement package worked out with state government, the state of Alabama and the community will make various highway improvements in the area, provide site and infrastructure improvements and funds to train new Honda associates.

In 1997, Honda announced plans to increase production in North America to 1.01 million units by 2001. Working toward that target, Honda produced 874,500 cars and light trucks in the US and Canada last year using North American and globally sourced parts. More than 75% of the vehicles Honda sold in the US in 1998 were produced in North America. Honda purchased more than $6.8 billion in parts and materials in 1998 from nearly 450 North American suppliers.

Last year, American Honda achieved record US sales of 1,009,600 new Honda and Acura cars and light trucks, exceeding one-million for the first time in history - and the third straight year of record annual sales. The Honda Civic, Accord and CR-V all are retail sales leaders in their segments, the new Honda Odyssey has been hailed as the benchmark in the minivan category, while the Acura TL has been recognized for setting a new standard for value in the luxury class.

"We have a very successful track record of developing products that offer a lot of value for the customer," said Thomas G. Elliott, executive vice president of American Honda. "But, increasingly we have been unable to satisfy all of our prospective customers due to such overwhelming demand. Our dealers have been clamoring for more product. So, this new plant will further enhance our ability to meet the needs of our customers from North America."

American Honda will mark its 40th anniversary in June 1999. Honda currently produces automobiles, motorcycles, all-terrain vehicles and lawn mowers at its US manufacturing operations using domestic and globally sourced parts. Honda also maintains R&D centers in Los Angeles, Ohio and North Carolina that design and develop many of the products sold in America and production engineering operations in Ohio. These operations play an increasingly important role within Honda's global organization.