China - Overview

Honda has continued to expand its operations in China, and better focus its strategy for the region. Honda has been establishing a strong brand identification in each business line to clearly differentiate it from the competition in the areas of sales, service, and products.

A wholly-owned subsidiary - Honda Motor (China) Investment Co., Ltd. (HMCI)- has consolidated regional headquarters functions and is responsible for developing Honda's overall business strategy in China. This includes facilitating the integration of Honda's growing operations in China into the concept of sharing the company's global resources.

Motorcycle

  • Sundiro Honda and Wuyang-Honda are replacing existing plants, which were built in the 1980s, in order to update their production systems and prepare for future expansion of its production capacity. The new plants will achieve major improvements in production efficiency through the introduction of synchronized production and other systems.
  • HMCI established a branch in Shanghai, specialized in motorcycle business. The Shanghai branch is responsible for the development of Honda's entire motorcycle business and product strategies in China, as well as for supporting marketing, service, quality and procurement for Honda's motorcycle subsidiaries in the country.
  • Honda is now well-positioned to take advantage of the 11 million-unit Chinese motorcycle market - with annual sales reaching nearly 1 million units in 2004.
  • Honda exports more than 200,000 motorcycles made in China to Japan, Africa and the Middle East. In 2005, surrounding Asian countries are to be added to the destination. These motorcycles are made using parts from multiple countries.
  • Honda became the first international motorcycle maker to establish a motorcycle R&D operation in China in 2002, to focus more closely on local customer needs.

Automobile

  • Honda's total annual production capacity in China will be doubled from the current 270,000 units to 530,000 units by the latter half of 2006.
  • Guangzhou Honda, Honda's first automobile production operation in China, will add a second plant with an annual production capacity of 120,000 units to be operational in the latter half of 2006. Guangzhou Honda began auto production in China with the Accord in 1999. In addition to the Accord, the plant currently produces the Odyssey minivan (Japanese version), the Fit Saloon and the Fit Hatchback. Guangzhou Honda now has a production capacity of 240,000 vehicles annually. Guangzhou Honda is also responsible for distributing automobiles through the exclusive dealer network in the country.
  • Honda also produces an equal amount of engines in China through its Dongfeng Honda Engine joint venture operation.
  • Honda Automobile (China) Co., Ltd. - a joint venture with Guangzhou Motor and Dongfeng Motor produces small cars (Jazz for Europe) exclusively for export with the annual capacity of 50,000 units.
  • Dongfeng Honda Automobile Co., Ltd. began production of the CR-V in April 2004. Annual production capacity is at 30,000 units, increasing to 120,000 units by early 2006 with introduction of the new Civic.
  • To support these local operations, Honda Engineering China will begin operation in fall 2005, of a new facility to produce dies and support mass production.

Power Products

  • Honda began producing power products in China in 1995 through the joint venture company Honda-Mindong Generator Co., Ltd. In 2002, Jialing-Honda, a motorcycle joint venture company also started production of power products.
  • In 2001, Honda began exporting a China-made generator model to Japan. The export of general purpose engines from Jialing-Honda Motors Co., Ltd. in Chongqing began in 2003, to markets including Europe and Australia.
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