Corporate / Worldwide Operations
South America Operations -- Overview
Honda's growing manufacturing and R&D operations are well situated within the South America Region. Honda has been producing motorcycles in Brazil since 1976, and automobiles since 1997. R&D activities began in 1980.
Established in the year of 2000, Honda's South America Region Operation is responsible for developing strategies that reflect the unique economic, cultural and market conditions of the Region - such as MERCOSUR, region's Southern cone free trade agreement - and for the management of both Honda's R&D and manufacturing operations in Brazil.
Honda's strategic positioning in the MERCOSUR provides a solid foundation for its growth in the region. Mercosur member countries are currently pursuing many trade agreements with other nations within the Americas. As one example, Brazil, Argentina and Uruguay have a trade agreement with Mexico. Thus, Mexican-built Honda Accords are exported to these countries as a result. Eventually, the ultimate expansion into the larger FTAA (Free Trade Area of the Americas) is targeted for the future.
- Moto Honda da Amazonia is one of Honda's largest motorcycle plants in the world, with an annual production capacity of 1 million units, focused on small displacement motorcycles.
- Honda Automoveis do Brasil has now an annual production capacity of 70,000 automobiles - building the Civic Sedan and the Honda Fit.
- Currently, the local parts procurement ratio in Brazil for the Fit is approximately 70%. The expansion in Brazil to produce the Fit represents a $150 million investment including expansion of production capacity from 30,000 to 55,000units and employment to approximately 1,240 associates. Currently, the Fit is exported from Brazil to all left-hand drive markets in South America, Central America and the Caribbean - 19 countries in total.
- R&D activities in the region began in 1980 - a few years after the start of local motorcycle production - to focus not only on supporting local sourcing of assembly component parts, but also to conduct market research, product planning, product homologation, testing and styling design.
Honda R&D Brazil Center was established in 1997 to place greater focus on automobile market research within the region, to integrate with Honda's Brazilian automobile plant, and to increase local parts-sourcing efforts.