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, reported turkishdailynews.com.tr.

Following the footsteps of Ford, Fiat, Renault, Tofaş and Hyundai, the Japanese automotive giant Honda, which has been providing small-scale production for the home market, has plans to base its European production in Turkey. When the plans take effect, Honda Turkey, one of two Honda factories in Europe, will have an important mission to accomplish - Honda has a supply deficit of 250,000 units, and has plans to meet that deficit via its Turkey factory, Hürriyet Daily reports.
“Despite the fact that it is a member of the European Union, the United Kingdom is still not using the euro. Therefore our UK factory loses advantage in production. That factory will continue its production, but we will not invest any more into the facility. We decided to invest in 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, the capacity of the plant could increase to 100,000 by 2009, Karaaslan added. “We can always increase our production capacity depending on the supply deficit in Europe . After reaching production capacity of 100,000 units we will move our head office, motorcycle unit and replacement parts department to another building. We will then be able to 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 increases 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 is expected to expand to the Middle East and North Africa.