Japan's Honda Motor will build a new plant in Mexico to produce cars for the North American market to improve its profitability against a stronger yen and tariffs, a press report said on Sunday.
Construction on the plant may start next year near Honda's existing factory in Jalisco, Mexico, the business daily Nikkei said, adding that the new facility is due to begin operations in 2014.
Honda plans to spend about 20 billion yen ($260 million) on the investment, with the plant's initial production capacity expected to be 100,000 vehicles a year, the Nikkei said.
Honda currently ships Fit compacts to the US from a plant in Japan and sells about 60,000 units a year there.
Honda's existing plant in Mexico produces and exports sport-utility vehicles to such countries as the US and Brazil, it added.