Honda, Nissan consider exporting from China

Honda Motor Co. and Nissan Motor Co. may boost exports from China as rising production in the country, the world's fastest-growing auto market, cuts manufacturing costs.

"We're not exporting any Nissan cars from China seriously yet, but I don't preclude it from happening in the future," Nissan Executive Vice President Andy Palmer said in an interview Monday at the Shanghai Motor show. "At least amongst light commercial vehicles, we do have a plan for exports."

Honda plans to take advantage of growing production volumes, even as a strengthening yuan increases costs, said Atsuyoshi Hyogo, President of Honda Motor (China) Investment Co. said in an interview Monday. China is poised to outstrip the U.S. as the world's largest auto market with sales forecast rise 8.7 percent this year to 10.2 million units, according to the China Association of Automobile Manufacturers.

"Calculating for cost, China has an advantage against other countries," Hyogo said. Adding another model for export "is possible," he said.

Nissan started exporting China-made pickup trucks last year to Egypt under the brand of local partner Dongfeng Motor Group Co. Honda currently exports the Jazz compact to Europe. The car shares components with Honda's Fit model sold in China.

Honda's production costs at its export-only plant in the southern city of Guangzhou were higher than in Japan because of small volumes, said Ashvin Chotai, managing director of Intelligence Automotive Asia Ltd., an automotive consulting company in London. "With the larger scale, China is becoming more competitive."

China is likely to outstrip Japan as the world's largest auto-producing nation this year, Chotai said.

Nissan is also collaborating with Dongfeng and Zhengzhou Nissan Automobile Co., its light commercial vehicle venture, on a sales network outside China, Palmer said.

Nissan forecasts sales will rise 4.6 percent this year to 570,000 passenger and light commercial vehicles. Last year its sales surged 19 percent to 545,000 units.

Honda expects to boost China sales 10 percent in 2009, twice the pace of the overall market, with sales of 520,000 vehicles, Hyogo said Monday. It sold 473,000 units in the country last year.

The strengthening yuan has increased Honda's production costs by about 20 percent over the last few years, Hyogo said.

"With the Chinese economy getting stronger and stronger, the yuan is getting stronger and stronger," Hyogo said. "It will get harder, not easier."

The yen may weaken to an average 13.5 per yuan this fiscal year ending in March, compared with an average 14.6 yuan last year, Japanese rival Mitsubishi Motors Corp. President Osamu Masuko said Monday. The Tokyo-based company builds Galant and Lancer sedans in China.