Dongfeng Honda Urgently Expand Production: Sales of Honda in China May Catch Up with Toyota

On December 8, construction project of Dongfeng Honda’s third factory was officially launched in Wuhan economic and technological development zone. After starting the second factory construction in 2010, Dongfeng Honda expanded production again because of sales growth.

Honda's overall sales growth is obvious in China this year. So far, from January to November the accumulative total sales of Honda is 1.1148 million vehicles in China, with year-on –year growth of 28.3%. In China, sales of Honda is about 14800 vehicles more than Toyota’s and has achieved continuous double-digit growth for nine months. This year, sales of Honda in China could surpass Toyota for the first time. 

Get Rid of CR-V Dependence

Honda’s sales in this year is overall upgrading, particularly Dongfeng Honda, whose growth is obvious. ranking only second to automobile independent brand Geely.

Enhancements of product power lead to an sales improvement in Dongfeng Honda, in the past, the main sources for sales of Dongfeng Honda is SUVs, while sedan generates power this year, such as in November, the CR-V sales is 16400 vehicles, XR - V is 17500 and the civic sales is 11800 vehicles.

After civic become the new main sales force of Dongfeng Honda, the next is to solve the problem of insufficient capacity. Dongfeng Honda has built two plants at present, all located in Wuhan economic and technological development zone, the total production capacity is 512000 sets. However, along with sales promotion, this year Dongfeng Honda has twice adjusted full-year sales target, from the original annual sales target of 450000, later changed to 500000 vehicles, then adjust to 560000 vehicles.

Although the third factory is started, but there is still two years from formally put into production. therefore, over the next two years the growth of Dongfeng Honda will be restricted to capacity. "Productivity is a big topic for Dongfeng Honda, by 2017, based on the current capacity limitations, Dongfeng Honda can take only a few production organizational adjustment to better meet the development requirements of 2017, however, next year will certainly across 600000 sales target." Chen Binbo said.

Honda Surpassed Toyota in China for the First Time

Since Honda has entered China it has been trying to catch up with Toyota, however, the situation has changed this year, Honda not only catch up with the sales of Toyota in the previous 11months, and probably realize the annual sales advance.

However, from the slower growth of Toyota we can find that once the main model market encounter frustration, it will has a larger overall impact on the enterprise. Sales of Dongfeng Honda get a breakthrough, but through the price system adjustment, it harvest a certain sales growth, at the same time the brand has also been affected.

In the high-end market segment, products vacancies of Honda set a dangerous precedent for the brand competitiveness, such as in the large business models and large SUV segment, Honda still has a vacancy, and its subordinate luxury brand—Acura’s potential has not been released in China.