China Approves New Honda Car Factory For Export

TOKYO, Nov 22, 2002 Reuters reported that Honda Motor Co said today it received approval from the Chinese government to set up the first Sino-foreign joint venture to make cars solely for export.

Honda will own 65 percent of the venture, marking the first time China has allowed a foreign company to own a controlling stake in an auto-making tie-up.

Guangzhou Auto Group will own 25 percent and Dongfeng Motor will own 10 percent, Honda said in a statement. The three companies will together put $193 million into the project.

Foreign automakers are rushing into China's fast-growing automobile industry, which is expected to pump out more than one million cars for the first time this year, up from just 703,500 last year.

As announced in July, Honda aims to build small cars with engine size of 1-1.5 litres, with plans initially to build 50,000 cars a year, to be exported to Asia and Europe.

Production is due to begin in the second half of 2004.

The Japanese automaker already operates a 50-50 venture with Guangzhou Auto, which has been making Accord sedans and Odyssey minivans since 1998.