TOKYO -- Honda Motor Co. has confirmed it will build its Fit small car at its new plant in Mexico for export to the United States and other markets, as it expands its local production footprint to combat the Japanese yen's profit-eating strength.
The plant, near Celaya, Guanajuato, will begin operation in 2014 with a capacity of 200,000 vehicles a year. Honda broke ground on the project at a ceremony late Wednesday. The automaker first announced the plant last August, but didn't identify the model to be built there.
The plant will increase Honda's production capacity in North America to 1.87 million units by early 2014 from 1.63 million today, Honda said in a statement. Honda expects to employ 3,200 people at the new plant.
In January, Honda announced it would also build the next generation Acura NSX sports car in Ohio. That car is expected to go on sale by the end of 2014.
"Honda will soon produce everything from subcompacts to super cars in North America," said Rick Schostek, senior vice president of Honda of America Manufacting Inc.
"Last year, more than 85 percent of the Honda and Acura models sold in America were built in the U.S., Canada and Mexico, using domestic and globally sourced parts," he said. "And this will reach more than 90 percent in the coming years.
Honda is shifting more production outside Japan as the company fights the yen's soaring foreign exchange rate against the dollar and euro. The yen's rise undercuts profits from and the pricing power of Japan-made cars sold overseas.
American Honda sold 59,235 Fits in the United States in 2011 -- a 9 percent gain over 2010 sales.
Editor's note: An earlier version of this story gave the incorrect ground breaking date for the plant. Construction began Wednesday.