GAC and Honda sign agreement to produce Acura vehicles in China

Gasgoo.com (Shanghai July 19) - Guangzhou Automobile Group and Honda Motor have officially reached and signed an agreement regarding the manufacture of Acura vehicles in China. According to the agreement, both parties will aim to produce Acura brand vehicles via the Guangqi Honda joint venture by 2016. GAC and Honda have yet to reveal which Acura models will be among those domestically manufactured.

Over the past few years, the Chinese luxury automobile market has experienced rapid growth, attracting several new manufacturers to the country. Jaguar Land Rover, Volvo and Cadillac are just some of the brands that are now being sold in China directly or via joint venture partnerships with domestic companies.

The traditionally conservative Japanese manufacturers, which already suffered a major setback due to heated tensions arising from the Diaoyu Island dispute in late 2012, are coming late to the domestically-produced luxury vehicle market. Many analysts in the industry predicted that Japanese manufacturers would focus on markets in Southeast Asia in response to rapidly declining sales in China. However, the sheer size of the Chinese market seems hard to resist, with Nissan, Toyota and Honda all announcing ambitious expansion plans for their operations in the country.

Honda reported selling a total of 316,666 vehicles in China from January to June. The figure is 3.2 percent less than the 327,013 vehicles the manufacturer sold in the first half of 2012. By comparison, Chinese sales of Nissan and Toyota decreased 8.3 percent and 5.3 percent during the same time period, respectively.