Honda confirms $436 million investment in China as sales surge

Honda‘s joint venture with Dongfeng Motor Group will spend approximately 3 billion yuan ($436 million) in a new factory located in China, the Japanese car manufacturer stated in a declaration on its website.

The declaration verifies a previous report from October that mentioned sources saying the car manufacturer would develop a new factory by 2019 with annual production capability of 120,000 vehicles.

Honda has experienced explosive development in China during the last two years regardless of an economic slowdown, luring customers with strong new offerings in the fast growing sport-utility vehicle (SUV) sector. Honda sales have boosted 28.3 percent year-on-year in the first 11 months of 2016, it stated on Friday.

The Dongfeng Honda venture, among Honda’s two JVs in China, is presently nearing its capacity limitations at its two factories, targeting sales of 450,000 lorries for 2016 versus present yearly capacity of 480,000.

The plant will have ability to develop new energy vehicles, the Chinese term for battery electric or plug-in hybrid vehicles, the statement included.