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Honda's UK manufacturing plant is to become a "mother" plant for the group's eastern European production plant in Turkey. The Turkish plant is scheduled to increase production to 50,000 vehicles by the end of 2007.

Honda of the UK Manufacturing (HUM) will provide engineers to oversee design and construction operations and help to train workers for the new plant. The UK manufacturing is itself expanding this year, with 700 new staff and a total production intended to reach 250,000 vehicles.

Ken Keir, managing director of Honda (UK) and senior vice-president of Honda Motor Europe, said: "Honda's fundamental strategy has been to manufacture products where the demand is, and this practice has been carried out for our operations here in Europe."

* Keir said that the decision whether the UK joined the euro zone was one for the people of the UK to take. But, he added: "In terms of business efficiency, we think a single currency would allow us to run our business in a more efficient way."