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Honda offshoot Yachiyo Industry is to build a new plant in Japan to produce both engines and bodies for Honda's range of mini vehicles.

Yachiyo already makes some vehicles as well as motorcycle parts at its present factory at Yokkaichi. The new plan is to build a new factory alongside the present plant and then to build the front-engined Life and Zest models there with the mid-engined Vamos and Acty moving into the older plant, which will concentrate on car production from then on.

The scheme is all part of Honda's strategy to improve logistics in its operations. The mini-vehicle engines will be taken out of the Kumamoto plant and sent to Yokkaichi and at the same time mini transmissions will move from Kumamoto to the Suzuka plant nearby.

Honda is spending more than €300 million on the moves. The new engfine plant is scheduled to be up and running in the first half of 2009, with the vehicle production lines ready in the second half of 2010. The combined annual production of the two plants will be 240,000 units.

Yachiyo is 50.34 per cent owned by Honda and controlled by it.