Honda Plans for an Engine Plant in Guangzhou

By: Anthony Fontanelle

Honda Motor Co., a Japanese motorcycle and automobile maker, is planning to invest JPV 30 billion to build an engine plant in Guangzhou, the capital city of south China's Guangdong Province.

Guangzhou Honda Automobile Co., Ltd., a joint venture between Honda Motor Co. and China's Guangzhou Automobile Industry Group Co., Ltd., aims to begin the production in the new plant by 2009. The plan is to boost the company's engine production capacity in China - the world's second largest car market.

The new plant will be sustained with highly advance equipment. The company primarily plans to use the plant in making 2.4 L and 1.3 L engines, which will be fitted to several major Honda vehicles, including the Accord, Odyssey and Fit. It is expected to have a production capacity of 200,000 units a year.

According to a report from French new agency, Honda, however, has denied the news regarding its plan to establish a new engine plant.

Last year, the Japanese auto giant, also a maker of quality , achieved a record production of 352,500 vehicles in China, marking 132 percent improvement compared from the sales in 2005.

This year, the company is looking forward to produce approximately 42,000 vehicles in China for export, accounting to about 70 percent hike. This will lead the export model two-compartment Fit to be entirely turned out in the Guangzhou production base.

Honda China spokesperson Zhu Linjie revealed that the company would likely increase their export destinations throughout 12 countries in Europe this year.

In June 2005, Honda shipping the China-made two-compartment Fits to Germany. Later, the company also delivered it to many other countries around the globe. At the end of 2005, the Japanese auto maker was able to export the products to not just Germany, but also to Belgium, to the Netherlands, and to Austria; and, to Italy in 2006. Currently, it is selling those products to Austria, Switzerland, Spain, Germany, and the UK.

Last July, Guangzhou Honda set up a wholly-owned R&D arm. It is to support the company in coping with the increasing customer demand for Honda models. By fact, it is the first time for a joint venture to establish its independent R&D unit within China - known as Guangzhou Honda Automobile Research and Development Co., Ltd. The unit will engage to model design, model trial production, vehicle testing, and parts R&D.

The venture also brought its second plant into operation in September of 2006. The plant serves as a significant help in boosting Honda Motor Co.'s total production capacity in China to about 530,000 vehicles annually.

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