Honda Motor Co, Japan's third-largest automaker, will invest four billion yen (US$33.2 million) to boost production in China to introduce its popular minivan to the blossoming Chinese market, a business daily said on Tuesday.
The Nihon Keizai Shimbun said Honda will start mass producing Odyssey minivans by 2003 at a factory in Guangzhou, where the company plans to manufacture 50,000 Accords this year.
"We are still examining the possibilities for the Odyssey in the Chinese market, and nothing definite has been decided," a Honda spokeswoman said.
Honda is zooming past rivals in the Japanese domestic market through booming sales of its minivans and subcompacts, but is looking to expand into China, where car purchases by individuals only account for 40 percent of total sales.
With reports that the Chinese government is formulating a policy to ramp up private car purchases to 70 percent of total sales over the next 10 years, Honda wants to offer a wider lineup of vehicles to China.
The company hopes to boost output capacity at its Guangzhou factory by 40 to 60 percent by next autumn with an eye toward producing between 10,000 to 20,000 Odysseys on a yearly basis, the newspaper said.
Honda has been one of the best performing shares on the Nikkei 225 average since the start of the year, up more than 10 percent, but has seen its shares plummet since the start of August as investors knocked down the share price to lower the company's lofty valuations.
Honda trades at a price-to-earnings ratio of 41, compared to PE ratios of 16 for Nissan Motor Co and 38 for Toyota Motor Corp.
(China Daily 08/21/2001)
