Honda-Denway China JV to lift capacity by a third

Guangqi Honda Automobile, a Chinese joint venture of Honda Motor, said it plans to lift its automobile production capacity by a third to meet strong demand in China, the world's largest auto market.

Guangqi Honda, a 50-50 joint venture between Honda and Guangzhou Automobile's Denway Motors (0203.HK), will double the capacity of its second plant to 240,000 units a year by 2011, it said in a statement on Tuesday.

Guangzhou Auto's chairman Zhang Fangyou said last November that Guangqi Honda might boost capacity of its second plant, taking capacity of its two plants to a total of 480,000 units.

China overtook the United States as the world's largest auto market last year under a raft of policy incentives, making it a bright spot during a global industry downturn.

Auto sales continue to grow rapidly this year in China, with 6.17 million vehicles sold in the January-April period, up 60.5 percent from the same period last year.