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Honda to Double Vehicle Output in China
Japan's Honda Motor Co plans to double its vehicle output in China next year as an important part of its global expansion strategy.

Guangzhou Honda, the company's joint venture with Guangzhou Automobile Group, said yesterday that it will produce and sell 110,000 vehicles next year - up from the expected 59,000 units this year.

It follows Honda's announcement on Wednesday in Japan that it will increase its global output to 3.1 million units next year from a record high of 2.82 million this year.

Zeng Qinghong, executive vice-president of Guangzhou Honda, said the joint venture produced 56,495 vehicles during the first 11 months of this year, including 44,858 Accord sedans and 11,637 Odyssey multi-purpose vehicles.

"We plan to launch two new models next year to achieve our target," Zeng said.

The joint venture will introduce a new US-developed Accord sedan next month, he said.

The new Accord will be equipped with the 2.4-litre engine, he said.

According to Kadowaki Koji, president of Guangzhou Honda, the joint venture will also launch a Fit small-sized notchback car in the middle of next year.

The joint venture stopped production of its existing 2.0, 2.3 and 3.0-litre Accord sedans earlier this month in preparation for the introduction of the two new models next year, Koji said.

But the company did not reveal the price tags.

Guangzhou Honda will cut the price of the Odyssey from 298,000 yuan (US$35,900) to 268,000-278,000 yuan (US$32,410-33,490) next week to attract more consumers.

Zeng said the joint venture will add an investment of 1.28 billion yuan (US$154.2 million) next year in introducing the new models and enhancing its production capacity.

Guangzhou Honda plans to increase its annual capacity to 240,000 units by 2004 from the 120,000 units expected at the beginning of next year, he said.

According to Koji, the Fit will share the majority of spare parts, including engines, with the small cars to be produced in 2004 at Honda's other joint venture in Guangzhou to cut costs.

The newly launched joint venture - in which Honda, the Guangzhou auto group and Dongfeng Motor Corp control 65, 25 and 10 per cent stakes respectively - will initially produce 50,000 small cars each year. All of its cars will be exported.

Zeng said Guangzhou Honda will continue to improve its sales and service networks.

It will increase the number of its franchised sales and service stores across China to 200 next year from 140 at present, he said.

Guangzhou Honda appears very optimistic about the Chinese car market because of the nation's rapid economic growth.

It predicted that sales of domestically made cars will exceed 1.4 million units next year - up from 1.15 million this year.

According to Zeng, annual demand for cars in China will reach around 2.5 million units by 2005.

(China Daily December 20, 2002)

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