Japan’s Honda Motor plans to build its fifth car plant in China to cope with mounting competition in the fast-growing auto market, according to a press report released on Saturday.
The new plant, with an annual capacity of 120,000 units, will boost Honda’s production in China by 20 percent to 730,000 units a year, the business daily Nikkei said.
It will be built next to the existing factory of Honda’s Chinese joint venture Dongfeng Honda Automobile in the central city of Wuhan and is due to be operational by 2011, the report said.
Initial investment in the project is estimated at 20-30 billion yen (220-330 million dollars), the report added.
No one was immediately available at Honda’s head office in Tokyo to confirm the report.
Car sales in China are forecast to exceed 13 million units this year with the communist nation replacing the United States as the world’s biggest auto market, Nikkei said.
Dongfeng Honda’s annual production capacity is 200,000 units and the new plant will mainly produce the next all-new Civic subcompact model.
Honda also assembles the Accord and other vehicles at two plants belonging to joint venture Guangqi Honda Automobiles based in the southern city of Guangzhou — at an annual rate of 360,000 units.
It also has another plant in China producing an annual 50,000 cars for export mainly to Europe, the daily said.
Other Japanese carmakers are also trying to expand their share of the Chinese market, in which Volkswagen, South Korea’s Hyundai, General Motors and Toyota all have significant stakes.
