April 23, 2012 / 5:50 AM / 6 years ago

UPDATE 2-Honda gets back in game in China with new product, R&D push

* Unveils two concept cars developed for mainland

* Spending $560 million for car and engine plants

* Model push is to make up for lost time in China

By Chang-Ran Kim

BEIJING, April 23 (Reuters) - Honda Motor Co on Monday unveiled two concept cars developed for China and announced plans to build two new plants there to assemble cars and engines, in an attempt to catch up with its rivals in product offerings in the world’s largest car market.

Honda unveiled the Concept C and Concept S, developed for the Chinese market, that will be the base for two new models to be produced and sold next year with partner Dongfeng Motor Group . The Concept S people mover was developed with China as its main target market, but with a view to selling it globally, Honda said.

“In the past, that kind of thing was always done in Japan,” chief executive Takanobu Ito said on Monday. “This will be a global car, but it starts in China. We need to move further away from a U.S.-centred global growth.”

Honda also said on Monday it would spend 46 billion yen ($560 million) to build a new car and a new engine plant in China, boosting its annual production by around 30 percent.

Guangqi Honda Automobile Co, a Chinese joint venture with Honda, plans to boost annual production to 600,000 vehicles in 2014 from the current 480,000, Honda said.

The boost in production will raise Honda’s total output capacity, including its export-only plant and factories operated with its other partner, Guangzhou Automobile, to 1.01 million a year in 2014 from 770,000 now.

Honda said it plans to start construction of the plants by the end of this year and aims to have them operational in 2014.

Honda Motor earlier this month said it would launch 10 new car models in China between now and 2015 and expects that by 2015 its annual China sales will be double those recorded in 2011.

Ito said that new models for China signified Honda’s plan to make up for lost time in the past few years in China when they lagged rivals in product offerings.

After a disaster-filled 2011 when its Chinese sales fell for the first time, Honda is targeting a more than 20 percent rise in sales this year, its China chief, Seiji Kuraishi, said.

Meanwhile, Ito said Honda had no current plans to share or sell its hybrid technology with Chinese automakers, denying a newspaper report a day earlier.

“We definitely want to make use of our strength in hybrid technology in China. I think the technology will be very successful eventually, but not just yet,” he said.

“Our first priority is to add more compact models and increase our sales volumes. There’s so much more to do (before producing hybrid cars locally in China).”

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