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Honda to make Turkey its base

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Honda, which has a supply deficit of almost 250,000 units, plans to meet the need for new cars by making Turkey the core of its European operations. New plans and investments might emerge during the upcoming visit of CEO Takeo Fukuki to Istanbul.

Following the footsteps of Ford, Fiat, Renault, Tofaş and Hyundai, the Japanese automotive giant Honda, which has been providing small-scale production for internal market, has plans to make Turkey its base in Europe. When the plans materialize and take effect, Honda Turkey, one of two Honda factories in Europe, will have an important mission to accomplish, because Honda has a supply deficit of 250,000 units, and has plans to meet that deficit via its Turkey factory, reported Hürriyet Daily.

“Despite the fact that is a European Union member, the United Kingdom is still not using the euro. Therefore our UK factory looses advantage in production. That factory will continue its production but we will not make any more investments on that facility. We decided to invest on a new facility in Turkey,” said Honda Chairman Takeo Fukuki. With $100 million investment, Honda Turkey factory will increase its production capacity from 30,000 to 50,000 units by October 2007. Honda has more than 1 million unit supply deficit in total, said Ümit Karaaslan, Honda Turkey Assistant General Manager.

Based on the results of 50,000 production units, production capacity of the plant could increase to 100,000 by 2009, Karaaslan added. “Depending on the supply deficit in Europe we can always increase our production capacity. After reaching production capacity of 100,000 units we are planning to move our head office, motorcycle unit and replacement parts department to another building. We can then increase our production capacity to 140,000 units,” said Karaaslan. Honda Turkey is about to launch the production of a new car model after the capacity of Gebze factory has increased to 100,000 units.

“We are producing Civic Sedan and City at the moment. The production of the second generation City will shift to Japan, but we will continue selling City in Turkey as an imported product. A second model with a capacity of 100,000 units will replace City. The details of this model will become clear at the end of the year. It might be Accord, or a brand new model,” Karaaslan explained.

In the future Honda Turkey plans to produce 4,000-units a month, 2,500 of which will be exported.  From October, the number of countries where Honda Turkey exports will increase to more than 10.  At present the firm exports Civic Sedan and City models to Slovakia, Hungary, the Czech Republic and Poland but from October it will also start exporting to Israel, Greece, Ukraine, Russia, Portugal and the Baltic states. In 2008 export business of the firm is expected to expand also to the Middle East and North Africa. (turkishdailynews.com.tr)

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