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Corporate May
29, 2003 |
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Honda Breaks Ground for New Auto Plant in China;
Event Signals Full-Scale Preparation for Export-Focused Plant |
Guangzhou, May 29, 2003 --- Honda today held a groundbreaking ceremony for a new
passenger car plant in China, with production to begin in the latter half of 2004 dedicated
exclusively for export. The new joint venture company, Honda Automobile (China) Co.,
Ltd., conducted the event within the Export Processing Zone in the Guangzhou Economic
& Technological Development District where the plant will be built.
Since Guangzhou Auto Group Corp., Dongfeng Motor Corp. and Honda signed a joint
venture agreement for the plant in July 2002, the partners have been finalizing the project
details. As the Chinese government has approved the finalized business plan, the project
is accelerating preparations to begin operations in the latter half of 2004. The production
volume of the new plant is initially planned at 50,000 units per year, focused on
production of small 1.0- to 1.5-liter passenger cars exclusively for export to overseas
markets, primarily in Europe and Asia.
Honda aims to improve its cost competitiveness through the new plant by taking
advantage of the production expertise and parts procurement network developed by the
existing production bases of Guangzhou Honda Automobile Co., Ltd. and Dongfeng
Honda Engine Co., Ltd. Honda also expects to improve cost competitiveness by
achieving economies of scale via increased production volume, as Guangzhou Honda
plans to produce the same model for the Chinese market. Guangzhou Honda will supply
large stamped parts and large plastic parts including bumpers to the new plant, while
Dongfeng Honda will supply engines and transmissions. The new plant will also utilize
the parts procurement network developed by Guangzhou Honda and Dongfeng Honda for
the supply of other components.
Outline of Honda Automobile (China) Co., Ltd.
| Production models |
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1.0- to 1.5-liter small passenger cars |
| Production volume |
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50,000 units per year |
| Manufacturing processes |
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Welding, painting, body assembly and vehicle inspection, etc. |
| Export markets |
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Europe and Asia
(Entire production volume for export) |
| Total investment |
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1,032,150,000 yuan |
| Capital |
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680,000,000 yuan |
| Capitalization ratio |
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Honda Motor Co., Ltd. 65%
Guangzhou Auto Group Corp. 25%
Dongfeng Motor Corp. 10% |
| Location |
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Export Processing Zone, Guangzhou Economic & Technological Development District |
| Production start-up |
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Latter half of 2004 |
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