GAC Honda to absorb export-focused subsidiary, adding capacity by 50,000 cars per year

Shanghai (Gasgoo)- GAC Honda, a joint venture between Chinese automaker GAC Group and Japan-based Honda, on March 29 announced it will absorb its wholly-owned subsidiary, Honda Automobile (China) Co.,Ltd. (CHAC), expecting to enhance its resource utilization and operational efficacy.

Effective April 1, 2020, the absorption renames the subsidiary as GAC Honda Guangzhou Development District, which works as GAC Honda’s fourth complete vehicle assembly line. The other existing three are located at Huangpu and Zengcheng districts. Besides, the joint venture also operates an engine factory.

Established in September 2003, CHAC is the first Chinese automaker that exports 100% of its products. After the completion of the merger, its two major businesses—complete vehicle production & export and global supply of knock-down kits (KDs) will be retained.

The newly-absorbed facility features an annual capacity of 50,000 vehicles, according to GAC Honda. It will continue producing the City cars for the export to Mexico, and start to manufacture vehicles for domestic sale from this year's April—the Accord will be made first.

Moreover, the KDs are scheduled to be offered globally to OEMs in 13 countries and regions like Thailand.

Through the latest transaction, GAC Honda will increase its total yearly vehicle capacity to 770,000 units in 2020. Last year, the company output roughly 760,000 vehicles based on a basic yearly capacity of 600,000 units. The revamped third car plant (at Zengcheng District) was put into production a few days ago with its annual capacity doubled to 240,000 units (photo source: GAC Honda).