Honda aims to lift output to meet rising demand
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Honda Motor Corp plans to boost production in China by one-third to 830,000 units by the second half of 2012 to meet rising demand in the world's largest auto market.
Guangqi Honda Automobile Co, its venture with Guangzhou Automobile Group Co Ltd, will increase the annual output of its Zengcheng plant to 240,000 units by the second half of 2011, it announced yesterday. The output expansion, which includes upgrading existing assembly lines and adding new equipment, will boost total production capacity of the venture to 480,000 units annually by then.
Honda decided to increase output as it faces rising competition from international car makers eager to grab a bigger slice of China's rapidly growing auto market which is riding on a low vehicle population and rising income of consumers. Auto sales in China may top 15 million units this year.
Honda's other venture with Dongfeng Motor Corp earlier also announced plans to build a second plant which will have an initial output of 60,000 units when it begins operations in the second half of 2012.
The 22.5 percent rise in Honda's sales in China to 576,000 units last year still lagged behind the industry average of 46 percent and was also slower than Volkswagen's 36.7 percent and General Motors' 67 percent in the country.
Honda needed to increase production because of stiff competition in southern China from its rivals, according to the market.
Volkswagen is boosting sales from 150,000 units to 500,000 units in southern China within three to five years. The German car maker has injected another 1.6 billion euros (US$2.1 billion) in China to build two new plants and will add new models.
Nissan Motor Corp's Chinese venture, Dongfeng Nissan, invested 5 billion yuan (US$733 million) in a second plant in Guangzhou in Guangdong Province.
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