Honda to Invest $215M in Ohio Facility

Zacks

Honda Motor Co. (HMC) will invest $215 million on infrastructural development for its Ohio plant. With this money, the automaker will expand its engine plant and build two training centers in the state.

Reportedly, the investment will create 60 jobs, of which 50 will be from Honda’s other operations in North America. We believe these investments would not only add operational efficiency, but will also help revenue growth over the long-term.

According to reports, the company will spend around $180 million on its engine plant in Anna, Ohio, and the rest will go in making two training centers at its assembly plant in Marysville, Ohio. The training facility will be for auto assembly workers and engineers, and will have an office space and heritage centre to showcase Honda's historical achievements in North America.

Over the years, Honda has been increasingly focusing on its infrastructural developments. This year in May, Honda announced plans to manufacture the new version of its Acura NSX sports car at a new plant in Ohio. The company will invest $70 million for building the plant known as Performance Manufacturing Center, located inside the former North American Logistics facility and adjacent to Honda’s existing facility in Marysville.

According to reports, the company has invested nearly $2.7 billion across North America. Among these investments, a notable move for the company has been its partnership with General Motors Company (GM) on developing next-generation fuel cell vehicles in order to meet the fuel economy standard set in the U.S.

Both these companies aim to develop the vehicles by 2020. Alongside experimental vehicle fleet, Honda and General Motors already share more than 1,200 fuel cell patents between them, filed between 2002 and 2012. We believe the alliance will bring down their costs in building this expensive technology by sharing each other’s expertise and suppliers.

Honda retains a Zacks Rank #4 (Sell). Other stocks worth considering in the auto sector include Nissan Motor Co. Ltd. (NSANY) and Fuji Heavy Industries Ltd. (FUJHY), both having a Zacks Rank #1 (Strong Buy).

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