"In spring 2005 we will double our capacity in Japan to 70,000 units a year from the current 35,000 to cope with the rising demand," said Shigeru Takagi, president of Honda Europe.
Honda also will start building diesel engines at its plant in Swindon, England, at the end of next year.
HOW MANY DIESELS IN UK
Honda plans to rapidly expand its diesel range to all its models sold in Europe.
So far only the Civic and the Accord are available with diesel motors. Honda will offer a diesel version of its CR-V sport-utility from next spring and a diesel version of its FR-V minivan from next summer.
Honda expects 50 percent of European sales of the FR-V and its CR-V sport-utility to be diesel versions.
It plans to sell 20,000 FR-V units in 2005, its first full production year and 60,000 units of the CR-V annually.
Currently around 15-16 percent of the cars sold by Honda in Europe are diesels. Takagi said Honda expects to increase that figure to 40 percent in the medium-term.
In 2006 the FR-V and the next generation Civic will get an all-new diesel engine.
Expanding diesel production will help Honda to reach its target of selling 350,000 units in Europe within the next four years.
"We hope to sell around 250,000 cars this year. In 2005 the number should rise to between 280,000 and 300,000. We plan to reach 350,000 units by 2007," said Takagi.
Honda sold 217,500 passenger cars in western Europe last year.
"We owe our success to the Accord and our diesel engines," said Takagi.
This year Honda hopes to sell around 50,000 units Accords in Europe, 40 percent of them diesel engine versions.
Honda will add a second shift at its plant in Turkey when the new generation Civic is launched BUT will not build another auto plant in Europe.
"We want to reach full capacity for the two lines at our British plant before introducing an additional shift or increasing capacity," said Takagi.
Last year Honda built around 70,800 Civics and 114,000 CR-Vs at its plant in Swindon. Honda builds around 15,000 Civics a year in Gebze, Turkey in a single shift.
Honda's sales figures in Germany are slightly below target but Hideo Tanaka, Honda Europe North president, believes t he will achieve his German sales target of around 37,000 new registrations in 2004.