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Honda backs local development drive

By Yu Qiao (China Daily)
Updated: 2006-09-20 09:48

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.