TOKYO (AFP) - Japanese automaker Honda is to spend 340 million dollars to quadruple capacity at its joint plant with Dongfeng Motor in Wuhan, China, to 120,000 units by 2006.
The company said construction will begin this year to triple the size of plant buildings and improve on its current annual capacity of 30,000 units.
"Looking at the long-term needs of the Chinese auto market, this was deemed to be a necessary investment," said Honda Motor Co. spokesman Yuji Hatano.
Dongfeng Honda Automobile (Wuhan) Co. is a 50-50 joint venture between Honda and Dongfeng Motor Industry Investment Corp.
Earlier, the Nihon Keizai economic daily said Honda also planned to spend 20 billion yen (190 million dollars) to build a new factory in Guangzhou with a capacity of 120,000 cars, bringing Honda's total Chinese output to nearly 530,000 units by 2006.
Hatano, however, said the new Guangzhou facility had "not been decided yet."
However, a nearby export-oriented plant with a capacity of 50,000 units is due to begin operating "around the end of this year," the spokesman said.
The Wuhan plant will boost the number of workers to 2,800 from 930 by 2006 and will begin making the Civic sedan on top of its current output of the CR-V sport utility, Honda said.
11/08/2004 - 05:05 GMT - AFP