October 18, 2016 / 12:20 AM / a year ago

Honda to build new factory in China for compact cars - Nikkei

TOKYO, Oct 18 (Reuters) - Honda Motor Co will build a new factory in Wuhan, China, that would begin producing compact cars in spring 2019, boosting its output capacity in the country by about a fifth, the Nikkei business daily said on Tuesday.

Japan’s third-largest automaker by sales will spend “hundreds of millions of dollars” on the plant, which will start with capacity of 120,000 cars a year and gradually double in line with demand, the paper said.

The factory will be operated in a joint venture with local partner Dongfeng Motor Group Co, the Nikkei said.

Media representatives at Honda were not immediately available to comment.

China introduced a tax break a year ago that effectively shaves $1,000 off the price of passenger cars with engines of up to 1.6 litres, the Nikkei said.

Reporting by Chang-Ran Kim; Editing by Stephen Coates

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