Honda Motor Co. Ltd. says it is close to deciding on the location of a new $400 million vehicle-assembly plant in the U.S., set to open somewhere in the Midwest in 2008.

Honda says it chose the Midwest over the Southern U.S. due to logistical and engineering issues, rather than tax incentives. The plant, to employ more than 1,500, will produce 200,000 units annually.

Kim Hill, analyst for the Center for Automotive Research, says Honda, more than most other auto makers, values infrastructure over tax spiffs when deciding where to locate a new plant.

Based on his sources, Hill says Honda likely will choose a site in southern Indiana or northern Ohio.

Larry Jutte, senior vice president-procurement, Honda of America Mfg. Inc., says the auto maker has yet to determine whether the Midwest plant will have a supplier park.

Honda also will add a $140 million engine plant next to its existing Alliston, Ont., Canada, assembly facility. The plant is due to come on line in 2008 and will produce approximately 200,000 engines annually, with 340 workers.

Furthermore, Honda plans to build a $75 million expansion to its Anna, OH, engine plant, for production of engine components, currently supplied from Japan, by 2008.

Meanwhile, Honda in Japan is set to build a new ¥70 billion ($638 million) factory in Yorii, Japan, to begin production in 2010.

The facility will employ 2,200 and have an annual capacity of 200,000 units, including engines and vehicles.

Also, CEO Takeo Fukui, says Honda will offer a new, dedicated hybrid-electric vehicle (HEV) to debut in North America in 2009.