Honda Motor Co. has put off a plan to build a new plant in China amid recent signs of a slowdown in the world's second-largest economy, according to sources familiar with the matter.
The automaker is likely to decide on whether to build the plant after carefully assessing the outlook for auto sales in China, they said.
Honda was looking to start construction of the plant by the end of the year with Dongfeng Honda Automobile Co., a joint venture with China's Dongfeng Motor Corp., but had not yet made a substantial investment in the project, the sources said.
Honda's new car sales in China have been solid, rising 34 percent in the January-September period to 694,800 units compared with a year earlier.
Although new car sales in China rose in September, they declined in the five months through August, prompting Honda to shelve the plan.
Honda raised its annual production capacity in China to 1.13 million vehicles by improving an existing factory, allowing it to surpass its annual sales target of 950,000 vehicles.