Honda Motor Co. announced on Wednesday that by the end of 2001, it will increase its annual production capacity in the United States and Canada to more than 1 million vehicles from the current level of 790,000 units.

Since Honda already has a plan to add a production capacity of 120,000 units to its plant in Canada next fall, the total production capacity in North America will rise to 910,000 units by the end of 1998. "We expect that the strong demand for Honda vehicles in North America will continue, so we will expand our production there," Honda President Nobuhiko Kawamoto told a news conference.

Honda will also start importing 20,000 to 30,000 units of the U.S.-made luxury sedan Acura next fall to replace the Inspire currently sold in Japan. Backed by the weaker yen and increasing popularity of its vehicles in the U.S., Honda this year expanded its exports to the U.S.

This year, Honda sold about 934,000 units in the U.S. market, of which 240,000 were exported from Japan. Despite the expansion of the production capacity, Honda executives said the current level of exports to North America of around 240,000 units will be maintained in the future. "We are not increasing our production capacity to reduce our exports," Kawamoto said.

On the domestic front, Honda achieved its target of selling 800,000 vehicles annually, with its 1997 sales estimated to reach 803,000 units, up 5.4 percent from last year. Honda predicts that its domestic sales will slightly increase to 810,000 units next year.