Nissan, Honda plan mainland output boost
Japanese carmakers Nissan Motor and Honda Motor plan to boost their production capacities on the mainland by as much as 20 per cent in a bid to tap the country's growing demand for vehicles.
Dongfeng Nissan, the joint venture between Wuhan-based Dongfeng Motor and Nissan, would boost production to 560,000 units in October with three shifts, from 460,000 units with two shifts, a Nissan spokesman said. The firm's Guangzhou plant will also increase annual output to 460,000 units from 360,000 units.
Honda said its joint venture, Dongfeng Honda Automobile, would increase the annual capacity at its plant in Hubei province to 200,000 units by the end of this month from 165,000 units.
The facility was capable of making 240,000 units, and Honda would maximise production if demand kept surging, its spokesman said.
Honda, which has joint ventures with Dongfeng and Guangzhou Automotive Industry Corp, will see its capacity on the mainland increase to 610,000 units after the expansion.
'With domestic consumption a cornerstone of the government's plan to boost economic growth in the medium term, we believe China's rising wealth effects, aided by its growing rural population, will continue to drive consumer demand for passenger cars,' said Credit Suisse analyst Toh Hung Bin.
According to the China Association of Automobile Manufacturers, sales of passenger cars on the mainland surged 48.5 per cent to a record 874,000 units last month.
Total vehicle sales exceeded 1.14 million units, up 36.5 per cent from a year earlier and marking the fourth consecutive month that sales surpassed 1.1 million units.
The expansion plans of Honda and Nissan came after Toyota Motor Corp announced in May that it would lift production at its Guangzhou plant, which makes the Camry, to 360,000 units per year from 200,000 vehicles.
Toyota, which has joint ventures with Guangzhou Automotive and Jilin-based First Auto Works Group, has a total yearly production capacity of 803,000 units.
General Motors Corp, the United States' biggest carmaker that filed for bankruptcy protection last month, said it would build its ninth manufacturing plant in three to four years.
The firm expects its annual sales in China to double to two million units in five years.
Its US peer Ford Motor also seeks to boost its market share on the mainland from less than 2 per cent to more than 3 per cent this year after it rolled out the Fiesta model in March.
Deutsche Bank analyst Vincent Ha forecast sales of passenger cars on the mainland would reach 8 million units this year, against last year's 6.8 million units, on last-minute purchases in the fourth quarter, when the temporary purchase tax cut ends.
