February 21, 2014 at 2:00 pm

2015 Honda Fit to be built at new $800M plant in Mexico

2015 Honda Fit (Honda)

Honda North America Inc. on Friday started production of its redesigned 2015 Honda Fit at its new $800 million assembly and engine plant near Celaya, Mexico.

The Japanese automaker said it wants to build the subcompact Fit in North America to boost its volume and meet anticipated customer demand for the new Fit, a lighter, roomier and more fuel-efficient model. The past two generations of the Fit sold in the U.S. were imported from Japan, which hampered supply, Honda said.

The new Celaya plant has annual production capacity of 200,000 vehicles and engines, propelling Honda’s North American production capacity to 1.92 million vehicles. The new plant will start building Honda’s new small SUV later this year.

“We look at the new plant in Celaya as being able to improve our ability to supply fuel-efficient subcompact vehicles from within North America, starting with the Fit and later a new SUV,” Schostek said. “So this is really critical to us enhancing our competitiveness in a growing and very competitive segment of the market.”

Honda opened the plant with one shift of 1,600 employees. Schostek said Honda will double the workforce later this year with a second shift.

When asked whether Honda considered building the Fit in the U.S. and if it could build them here profitably, Schostek said Honda had focused on Mexico to build subcompacts. Schostek said labor and logistics costs were factors in its decision.

“Mexico is the proper place for us to build a subcompact vehicle,” he said.

General Motors Co. builds the only subcompact in the U.S., the Chevy Sonic, at its Orion Assembly Plant in Orion Township. The Detroit automaker worked with the UAW on a two-tier wage system to build the Sonic profitably in the U.S.

The new Fit was unveiled last month at the North American International Auto Show in Detroit. It goes on sale this spring.

Schostek would not comment on sales projections for Fit, but said Honda is projecting growth for the subcompact market over the long-term.

Fit sales have trailed other popular subcompact models in the U.S. such as the Nissan Versa. Last year, Honda sold 52,944 Fits in the U.S., up 7.5 percent from 2012, according to Autodata Corp. Honda also sold 569 Honda Fit EV vehicles in the U.S. last year.

In the past three years, Honda has invested nearly $3 billion in North America to boost production capacity. Honda expects once the Celaya plant is at full capacity, its percentage of Honda and Acura vehicles sold in the U.S. and built in North America will grow to more than 95 percent.

Honda also is building a $470 million transmission plant in Celaya. That facility will open in 2015 and employ 1,500 workers.

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