Honda Plans New Plant in China
Honda, joining a host of global auto makers expanding production capacity in China, plans to build a new plant in the country to keep up with surging demand.
Japan's Honda Motor Co., joining a host of global auto makers expanding production capacity in China, plans to build a new plant in the country to keep up with surging demand, according to two company executives.
The executives said one of Honda's main joint ventures is getting close to using up the capacity of a plant it operates in the city of Wuhan in Hebei province. That venture, with Dongfeng Motor Co., is expected to sell a total of about 200,000 vehicles this year, and its sales are likely to exceed the plant's maximum capacity as early as next year, they said.
The company plans to squeeze more additional capacity from the existing plant in Wuhan by investing further in it, said one of the executives who spoke on condition of anonymity. Still, the maximum capability Honda could extract from the existing factory is 240,000 vehicles a year.
"No final decision has been made, but clearly we are running out of capacity and have been thinking about expanding our production capability in Wuhan by adding a second plant," the same executive said.
An official announcement on the move is likely to be made "very soon," as early as at the outset of next year, one of the executives said.
According to the two executives, Dongfeng-Honda is likely to produce the Honda Civic car at the planned new plant, but one of them pointed to a possibility of adding an additional product there. Dongfeng-Honda currently produces three Honda-branded models, including the CR-V crossover and the Civic car.
The new plant in Wuhan could begin production by the end of 2011 and should be able to produce more than 100,000 cars a year, elevating Dongfeng-Honda's manufacturing capacity to more than 340,000 a year, according to the executives.
In addition to its manufacturing base in Wuhan, Honda also operates two final vehicle-assembly plants in Guangzhou with another Chinese partner. Those plants have combined capacity to produce 360,000 cars a year.
Honda has seen steady but unspectacular growth in China, which is poised to dethrone the U.S. as the world's biggest auto market this year, with vehicle sales that have grown about 50% through November, and that are expected to grow another 10% to 15% next year.
The auto maker's plans follow similar moves by several rivals to expand capacity in China. General Motors Co., for instance, plans to boost sales in China to more than two million vehicles a year and has plans to introduce two dozen new or updated models over the next several years. To reach that sales target, GM executives have said the company would most likely need to build another plant over the next few years.
BMW AG said last month it would build a second plant in China with its joint-venture partner that would cost about 560 million euros ($831 million) and more than double its production capacity in China to 100,000 cars a year. Others, such as Volkswagen AG and Nissan Motor Co., either have already added a new plant or are expanding existing facilities.
Source: Honda Plans New Plant in China
Japan's Honda Motor Co., joining a host of global auto makers expanding production capacity in China, plans to build a new plant in the country to keep up with surging demand, according to two company executives.
The executives said one of Honda's main joint ventures is getting close to using up the capacity of a plant it operates in the city of Wuhan in Hebei province. That venture, with Dongfeng Motor Co., is expected to sell a total of about 200,000 vehicles this year, and its sales are likely to exceed the plant's maximum capacity as early as next year, they said.
The company plans to squeeze more additional capacity from the existing plant in Wuhan by investing further in it, said one of the executives who spoke on condition of anonymity. Still, the maximum capability Honda could extract from the existing factory is 240,000 vehicles a year.
"No final decision has been made, but clearly we are running out of capacity and have been thinking about expanding our production capability in Wuhan by adding a second plant," the same executive said.
An official announcement on the move is likely to be made "very soon," as early as at the outset of next year, one of the executives said.
According to the two executives, Dongfeng-Honda is likely to produce the Honda Civic car at the planned new plant, but one of them pointed to a possibility of adding an additional product there. Dongfeng-Honda currently produces three Honda-branded models, including the CR-V crossover and the Civic car.
The new plant in Wuhan could begin production by the end of 2011 and should be able to produce more than 100,000 cars a year, elevating Dongfeng-Honda's manufacturing capacity to more than 340,000 a year, according to the executives.
In addition to its manufacturing base in Wuhan, Honda also operates two final vehicle-assembly plants in Guangzhou with another Chinese partner. Those plants have combined capacity to produce 360,000 cars a year.
Honda has seen steady but unspectacular growth in China, which is poised to dethrone the U.S. as the world's biggest auto market this year, with vehicle sales that have grown about 50% through November, and that are expected to grow another 10% to 15% next year.
The auto maker's plans follow similar moves by several rivals to expand capacity in China. General Motors Co., for instance, plans to boost sales in China to more than two million vehicles a year and has plans to introduce two dozen new or updated models over the next several years. To reach that sales target, GM executives have said the company would most likely need to build another plant over the next few years.
BMW AG said last month it would build a second plant in China with its joint-venture partner that would cost about 560 million euros ($831 million) and more than double its production capacity in China to 100,000 cars a year. Others, such as Volkswagen AG and Nissan Motor Co., either have already added a new plant or are expanding existing facilities.
Source: Honda Plans New Plant in China
