GUANGZHOU: Japan's No 3 carmaker Honda Motor Co will assist its joint venture
with China's Guangzhou Automobile Group to develop locally, the company's
president said yesterday.
"If Guangzhou Honda (the joint venture) wants to do its own development, we
will support it," Honda President Takeo Fukui said yesterday as the venture
launched a second plant in Guangzhou, capital of South China's Guangdong
Province.
The venture will concentrate on local development with its increasing
localization of spare parts and the improving capability of suppliers in China,
he said.
He made the remarks in response to the Chinese industry regulators' call for
Sino-foreign car ventures to enhance local development capabilities instead of
only assembling foreign-brand models.
German carmaker Volkswagen said last year it intended to support its two car
ventures in China to improve their development ability and foster their own
brands.
Guangzhou Honda's second plant has an annual production capacity of 120,000
cars with an initial investment of 2.2 billion yuan (US$275 million), taking the
joint venture's total capacity to 360,000 units.
The venture, which is making Honda's Accord mid-sized sedan, City compact
sedan, Fit sub-compact car and Oddyssey multi-purpose vehicle, sold 160,655
vehicles in the first eight months of this year, up 7.6 per cent from a year
ago.
It aims to increase sales to 260,000 units for 2006 from 230,000 units in
2005.
According to Fu Shoujie, executive vice-president of Guangzhou Honda, the
venture plans to launch at least one new model annually over the next few years.
Fu said the venture would use more locally made spare parts in its vehicles
to cut costs.
At present, more than 80 per cent of the spare parts used in the venture's
cars are made in China, up from 40 per cent in 1999.
Honda runs another joint venture with Dongfeng Motor Corp China's
third-biggest vehicle producer in Wuhan, the capital of Hubei Province. The
venture assembles Honda's CR-V sport utility vehicle and Civic compact sedan.
Sources from Honda Motor (China) Investment Co Ltd said the Japanese
carmaker's overall sales in China climbed by 17 per cent year-on-year to 194,000
vehicles from January to August this year. The nation is now Honda's
third-biggest single market in the world after the United States and Japan.
Honda aims to boost sales to 353,000 units in 2006 from 260,000 units last
year.
According to industry data, sales of made-in-China vehicles jumped by 25 per
cent to 4.53 million units in the first eight months of the year, including 3.23
million passenger cars.
Full-year sales are forecast to exceed 7 million units.
(China Daily 09/20/2006 page10)