February 11, 2016 / 9:15 AM / 4 years ago

Honda to start making gasoline-electric cars in China this year

Show attendees walk by the Honda display at the North American International Auto Show in Detroit, January 12, 2016. REUTERS/Gary Cameron

TOKYO (Reuters) - Honda Motor Co Ltd plans to start making gasoline-electric hybrid cars in China later this year, to meet increasingly stringent fuel economy regulations in a country blighted by worsening air pollution.

The Japanese automaker will build hybrid versions of its Accord sedan and Acura compact crossover sport utility vehicle (SUV) in the southern city of Guangzhou, Tokyo-based spokesman Ben Nakamura said on Thursday. It will follow those with a hybrid version of its Spirior sedan, Nakamura told Reuters.

“By locally producing hybrid models in China, we can lower their prices and hope to sell more,” he said. “That should help us more easily meet China’s tough fuel economy requirements.”

Chinese cities are frequently enveloped by smog from coal-fired power plants, heavy industry and clogged roads. To help clear the skies, the government has been tightening fuel economy regulations and offering tax breaks for new-energy cars.

Regulations will tighten gradually through 2020, likely forcing Honda and its peers to meet them by calling on all types of fuel-efficient technologies, such as all-electric and conventional gasoline-electric hybrids, industry officials have said. It was unclear how regulations will be enforced, they added.

Honda markets four gasoline-electric models in China, including a version of its Fit subcompact, but sales are limited as all four models are shipped from Japan and are subject to relatively high import duties.

The automaker currently makes and markets its gasoline-engine Accord and plans to start producing later this year the Acura crossover SUV through a joint venture with Guangzhou Automobile Group Co Ltd. It makes and sells the gasoline-fueled Spirior through a venture with Dongfeng Motor Group Co Ltd.

Reporting by Norihiko Shirouzu; Editing by Christopher Cushing

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