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Guangqi Honda to build 3rd production line; Honda increasing China capacity to >1M units annually by 2014

Guangqi Honda Automobile Co., Ltd. (GHAC), an automobile production and sales joint venture of Honda in China, plans to build a third production line within the property of the existing ZengCheng Plant. The construction of the third line will begin at the end of this year, and the line will become operational in 2014 with an initial annual production capacity of 120,000 units. GHAC is planning to further expand the capacity up to 240,000 units in the future.

GHAC is also planning to build a new engine plant in time for the start of production on the third line. The total investment for the third line (with capacity expandable up to 240,000 units) and the new engine plant is expected to be approximately 3.56 billion RMB (approximately US$564 million).

When the third line becomes operational in 2014, GHAC’s overall annual automobile production capacity will be increased from the current 480,000 units to 600,000 units. In the meantime, Dongfeng Honda Automobile Co., Ltd., another Honda automobile production and sales joint venture in China, is scheduled to begin production at its newly built second plant in July of this year, increasing the company’s annual production capacity to 360,000 units by 2013.

With these capacity expansion measures, Honda’s overall annual automobile production capacity in China will increase from the current 770,000 units to 1.01 million units in 2014. In addition to capacity expansion, Honda will further localize its R&D capabilities in China, the world’s largest automobile market.

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