• Bloomberg


Honda Motor Co. will raise production capacity in China by 28 percent to 830,000 vehicles a year by the second half of 2012 and introduce two new models, Chief Executive Officer Takanobu Ito said Tuesday in Guangzhou.

Guangqi Honda Automobile Co., a Chinese joint venture owned by Honda and Guangzhou Automobile Group Co., will double the capacity of its Zengcheng plant to 240,000 vehicles a year by the second half of 2011, Honda said.

The unit will add production of the Accord Crosstour wagon this year and in 2011 introduce the Everus sedan, the first car made under the new Li Nian brand.

Japanese automakers, including Toyota Motor Corp. and Nissan Motor Co., are rushing to add capacity in China as economic growth spurs demand in the world’s largest auto market.

China’s vehicle sales may rise 17 percent this year to 16 million as annual demand for automobiles may eventually exceed 30 million, according to an official at the State Information Center.

“Increased production capacity in China is positive for Honda,” said Satoru Takada, a Tokyo-based senior analyst at Toward the Infinite World Inc. “Limited production capacity is why Japanese automakers have not been able to increase their market share.”

Honda may increase China sales 9 percent this year to 630,000 vehicles, Ito said last month. On Tuesday he said sales growth in China may slow during the second half of this year.

Honda has three car factories in China and is preparing to open another with Dongfeng Motor Group Co. in Wuhan in the second half of 2012. Guangqi Honda builds Accord sedans, Odyssey minivans, Fit compacts and City compacts.

The expansion at the Zengcheng plant will raise Guangqi Honda’s total capacity by a third to 480,000 units annually from 360,000, Honda said.

Guangqi Honda’s sales increased 19 percent to 365,000 units in 2009, while sales in the first four months of this year rose 36 percent to 134,000 vehicles, according to the company.

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