Honda Motor Co. Ltd. is studying the possibility of building a second car assembly plant in the United States to give the Japan-based auto maker the capacity to build a total of 400,000 cars a year in this country by 1990, top Honda officials said yesterday.
Honda already has the ability to build 150,000 sedans annually at its plant in Marysville, Ohio; and the company is spending $240 million to expand that production capacity to 300,000 cars a year in 1987.
But, largely because of growing demand for its cars and the need to provide products in the below-$5,000 car market, Honda is exploring the possibility of building a second auto plant that can assemble an additional 100,000 cars a year in the United States, said Tetsuo Chino, president of American Honda Motor Co. Inc.
Honda's extra U.S.-production capacity, coupled with its imports, could boost U.S. sales to nearly 800,000 cars a year. In terms of unit sales, that would make Honda the fourth-largest of the six companies now manufacturing cars in the United States.
The build-in-America strategy means that Honda's "future sales increases in this country will come from domestic production," Chino said. It also means that Honda no longer is concerned about so-called voluntary quotas that have limited the shipment of Japanese cars to America since 1981, he said.
"We are not planning our future around voluntary restraints. It does not matter" whether those restraints will be in place, Chino said in an interview with The Washington Post. "Our future" in the United States "will depend on increased domestic production," he said.
Honda has been studying the possibility of further expanding the Marysville plant or of setting up a new facility, Chino said. He said that the company's final decision will depend on its assessment of future market conditions in the United States.
Honda also is beefing up its import lines. The company will start shipping its high-performance, luxury Acura and Integra models to this country next spring. The cars, designed to compete against European models in the $12,000 to $20,000 range, will be marketed through the newly created Acura Division of California-based American Honda, which is Honda Motor Co.'s import and distribution arm in the United States.
Chino dismissed speculation, often heard in the domestic car industry, that Honda is planning to abandon the economy segment of the U.S. car market, where the company gained fame with the introduction of the Honda Civic in 1974.
"That market segment is very important to us," Chino said. "We will never forget that market." But he conceded that the formerly inexpensive Civic "is becoming too upscale" for some buyers.
Clifford G. Schmillen, American Honda's senior vice president for sales, said that the lowest-priced Civic now starts at about $5,500. But California-based Automobile Invoice Service, which monitors new-car prices throughout the model year, lists the cheapest Civic -- a 2-door, CRX HF coupe with 5-speed manual transmission -- as starting at $6,729.
South Korean, Yugoslavian and Chinese car companies are gearing up to take advantage of what many auto industry analysts say is a strong U.S. market for new cars in the $5,000-and-under category. Those vehicles will be minicars and basic subcompacts.
Chino said that Honda is preparing to meet the Koreans and others in the under-$5,000 market. "We are doing research and development on this," he said.