Honda Set to Construct Another Automobile Production Plant in China

China: Dongfeng Honda Automobile, a joint venture of Honda in China for automobile production and sales, declared its plan to build another production facility across the country, in order to meet the growing demand for automobiles in the region.

The new plant is expected to be built on a 1.2 million-square-meter plot with an investment of over USD0.43 billion and is anticipated to be operational by the first half of 2019. Moreover, the plant’s production capacity is predicted to be around 120,000 units, an year.

Further, the new plant is being designed to accommodate the production of electrified automobiles, the demand for which is projected to grow during the coming next few years in the country. The production at new plant would increase the company’s overall capacity to 1.25 million units, in China.

“Honda sales in China is going strong and annual unit sales for 2016 is expected to reach 1.2 million units. The Chinese market has potential for further development and growth”, said Takahiro Hachigo, President, Chief Executive Officer and Representative Director of Honda Motor; he further added, "In order to continue meeting such strong demand, Honda will introduce its highly attractive products equipped with leading-edge technologies to the Chinese market ahead of other markets around the world and deliver joys to our customers here in China.”

As per TechSci Research, the new plant of Honda is expected to boost up the country’s OEM tire market, consequently, fueling the demand for tires in the country’s overall tire market, and eventually from the replacement segment as well, in the long run.

According to a recent report published by TechSci Research, “China Tyre Market Forecast & Opportunities, 2020”, during the last decade, China emerged as one of the leading economies worldwide in terms of GDP growth. The country has grown manifold and emerged as the leading manufacturing hub across the globe. With a population of over 1.35 billion, China witnessed multifaceted development within various industries for the past few years. The automotive industry, in particular, has grown at a tremendous pace owing to diverse factors such as increasing disposable income, rising standard of living and automobile export demand. This, in turn, has catalyzed the development of tire market in China in terms of both production as well as sales. Ongoing development in both urban as well as rural pockets and significant improvement in road infrastructure have been driving the expansion of automobile and tire market.