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Honda Restarts China Expansion Plans with New Wuhan Factory

The Honda factory, scheduled to start operating in 2019, will have initial annual capacity to make 120,000 vehicles.

Honda Motor Co. (IW 1000/19) has revived plans to expand production in China, beginning work on a new plant this year that will start operating in 2019.

The factory will have initial annual capacity to make 120,000 vehicles and could eventually produce 240,000 units a year, Chen Binbo, executive vice president of Honda’s China joint venture, said Tuesday in a phone interview. Honda said last year it would delay construction of a planned $822 million plant in Wuhan as industrywide demand slowed.

Demand for XR-V and Vezel sport utility vehicles have paced a 26% gain in Honda’s China sales this year through September. Industry sales began to recover in the fourth quarter of last year following the introduction of a tax cut on purchases of vehicles with smaller engines that’s scheduled to expire Dec. 31. Passenger-vehicle sales have surged 15% to 16.75 million units in the first nine months of this year.

Honda’s new models for China this year include an updated Civic compact and all-new Avancier and Acura CDX SUVs. The Tokyo-based company also is beginning to produce hybrid engines locally for Accord sedans.

Hyundai Motor Co., which counts China as its biggest market, said separately it plans to introduce a new SUV model to its plant in Cangzhou, in northern Hebei province. The Seoul-based automaker began producing the Verna Yuena sedan at the factory on Tuesday, according to a company statement. The plant will boost Hyundai’s annual output in China to 1.65 million vehicles by 2018.

by Ma Jie

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