Honda Motor plans to develop a new factory in China that will produce automobile from 2019, increasing its output capacity in the nation by about a fifth, 2 individuals knowledgeable about the matter stated on Tuesday.
Honda and partner Dongfeng Motor Group are having significant growth in China with sales for their joint venture skyrocketing 48 percent for the year to this day due to its appeal of the XR-V sport-utility automobile in addition to the just recently released Civic sedan.
At the same time, the venture, Dongfeng Honda, is coming close to its capacity limitations at its two factories, targeting sales of 450,000 automobiles for 2016 – not far off present yearly capacity of 480,000.
The new factory will be found in Wuhan, central China, a significant automobile hub. At first, it will produce 120,000 vehicles a year, with capacity most likely to double eventually, the sources said, refusing to be identified as there had not been an official announcement by the firms.
Honda validated that it was talking about the additional plant in Wuhan with Dongfeng, however that it had nothing official to reveal now. A Beijing-based representative for Honda said the task had yet to be officially authorized by the company or the government.
The strategy was at first reported by the Nikkei business daily, which stated the venture prepared to invest “hundreds of millions of dollars” on the factory.
The new factory is going to be Honda’s seventh in China. Honda likewise has a joint venture with GAC Group called Guangqi Honda that has three plants. Honda likewise has a separate plant for exports.