Honda Motor Co. said Wednesday it will boost overseas production to meet growing demand for its energy-efficient cars and other vehicles, concentrating on global growth amid declining domestic sales.

Japan's second-largest automaker by sales said it plans to build a second factory in Thailand to double production capacity to 240,000 vehicles a year, President Takeo Fukui told a midyear news conference at the company's headquarters in Tokyo.

Honda, the maker of Accord and Fit cars, will spend 23 billion yen on the Thai factory. It is expected to start production in the latter half of 2008.

Elsewhere, the company will invest $100 million in its first auto plant in Argentina. It will have the capacity to produce 30,000 vehicles a year when it opens in the second half of 2009.

Honda will invest $65 million in a second Vietnamese motorcycle plant, which will produce 500,000 units a year when it starts operations in the latter half of 2008.

A new auto plant in Indiana, Honda's seventh in North America, is set to begin production in fall 2008.

Meanwhile, another Honda plant in Mexico will expand production of the CR-V sport utility vehicle from the current 30,000 units a year to 50,000.

As a result, annual production in North America will reach 1.62 million units by next fall from the current 1.4 million.

On the domestic front, Fukui said demand is "a little bit worse than thought" and Honda will postpone introduction of its luxury Acura model by two years until 2010.

Fukui said he hopes the Fit, a popular subcompact, will play a leading role in boosting domestic sales.

Honda is strengthening local production centers close to their target markets to mitigate the impact of foreign-exchange rates on car prices, Fukui said, pointing out that 80 percent of Honda cars sold in North America are produced there.

"We had a bitter experience when the yen strengthened to 80 (to the dollar) in the 1990s, so it is the right thing to produce where the demand is," he said.

Meanwhile, Fukui said Honda will be the first foreign automaker to develop and market cars under an original brand in China.

He said vehicles bearing the new brand, which has yet to be decided and will be differentiated from the Honda brand, will be sold in China as early as 2010.

Guangzhou Honda Automobile Co., the company's auto joint venture in China, will establish a wholly owned research and development subsidiary in Guangdong Province with an investment of about 30 billion yen.

The subsidiary will set up an automobile R&D unit accompanied by a full-scale test course, Fukui said.

He said the automaker has received approval from Chinese authorities to begin engine production.

Information from Kyodo added