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Honda To Begin Making Cars In Russia -Nikkei

TOKYO (Nikkei)--Honda Motor Co. (7267.TO) plans to begin making cars in Russia, The Nikkei reported Sunday. The automaker will set up an assembly plant, importing the necessary components from elsewhere. The plant will be Honda's first in Russia. Honda submitted the plan to Russia's Economy Ministry sometime before Saturday and started talks with officials. The company plans to turn out 30,000-50,000 cars in Russia, with the initial investment likely to total several billion yen. The site for the plant will be chosen after consultation with ministry officials, with the maritime region in the Russian Far East a likely candidate. At present, Honda has no local production in Russia and imports cars sold in the country from the U.K., the U.S. and Japan. Tariffs of about 50% on imported cars make Honda vehicles more expensive than autos made by rivals locally. Honda is hoping a Russian plant will give a big boost to sales in the country, which totaled about 18,000 cars last year. Competition is intensifying in Russia among Japanese carmakers. Toyota Motor Corp. (7203.TO), Nissan Motor Co. (7201.TO) and Mitsubishi Motors Corp. (7211.TO) are making cars in the country, and Mazda Motor Corp. (7261.TO) is expected to follow suit in 2012.

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