Shanghai, June 1 (Gasgoo.com) Guangqi Honda Automobile Co, a joint venture between Guangzhou Automobile Group and Honda Motor, announced last week that it will invest 930 million yuan ($136 mln) to boost its annual production capacity to 480,000 cars, Xinhua News reported.
Guangqi Honda said the move will add 120,000 units to its current capacity in Guangzhou, capital of southern China's Guangdong province. The company will expand its existing factory buildings, only additing equipment and production lines.
Yao Yiming, executive vice-president of the joint venture, said the company will complete the expansion by the second half of 2011 to produce 480,000 cars in 2012. Guangqi Honda began the expansion only after its production reached full capacity.
The tight capacity has affected the joint venture's output and sales. Guangqi Honda reported a sales growth of 19% last year to 365,600 vehicles, much lower than China's overall passenger vehicle market growth.
In the first four months Guangqi Honda sold 135,000 vehicles, up 36% from a year earlier. If demand remains robust and its facilities and employees work extra shifts, the company may sell 400,000 cars this year.
Honda's car plants in China recently halted production as components ran short after workers at a parts factory in Foshan began strike for higher pay two weeks ago. Production is expected to restart soon.
