Dongfeng Honda ups '08 sales target, mulls new model

Shanghai, October 16 (Gasgoo.com) A top executive of Dongfeng Honda said that the joint venture has raised its sales target for 2008 from 150,000 units to 160,000 units or more, based on the growing sales of its two models: the CR-V SUV and the Civic sedan, said xinhuanet.com today. The company has decided to develop a new hatchback model for its market growth.

Amid the downturn in the auto market and target-slashing by many carmakers in China, Dongfeng Honda is the first car company that has announced its plan to raise this year's sales goal. The reason for this dramatically ambitious move lies in the good sales of its CR-V and Civic models. Since the Toyota Camry and Honda Accord were marked down by Guangzhou Toyota and Guangzhou Honda, the CR-V SUV has been the only model that has its priced raised in the market.

Dongfeng Honda has conducted its "hungry marketing" strategy, with its output and supply unable to meet the market demand. "The inventory of Dongfeng Honda is smaller than the sales," said the company's executive, adding that the company has plans to develop and make its own-brand hatchback to meet the growing demand and cut the costs.

Because of the high costs, the company has given up the idea of introducing a Honda Civic hatchback, and instead it will develop an own-brand hatchback model on the existing Civic sedan platform of the venture. Another motivation is that a self-developed hatchback, if lower-priced for the customers, will achieve better sales. The lower price is possible if the design and manufacturing costs are not high. 

Currently, Dongfeng Honda only makes two models, which are far from enough to boost its sales and growth. Therefore, one of the company's top priorities is to develop one more model at reasonable costs. The two side of the joint venture have initially agreed on a possible model, which is likely to carry a badge like the Guangzhou Honda's Linian, or use the Dongfeng label.