|Wuyang-Honda Begins Construction of New Motorcycle Plant|
|GUANGZHOU, China, December 9, 2004 - Wuyang-Honda Motors (Guangzhou) Co., Ltd., a motorcycle production and sales joint venture between Honda and Guangzhou Motors Group Company, has announced that it has begun construction of a new plant with the goal of improving efficiency and preparing for potential capacity expansion in the future. An investment of 200 million R.M.B. (approximately 2.56 billion yen), the new plant will become operational in spring 2006, with an annual production capacity of 700,000 units.
The new 69,000m2 plant will be located on a 320,000m2 lot in the Xintang Industrial Area of Zeng Cheng, 50 km east of the existing plant. The layout of the new plant will accommodate almost all production processes within one building. A major improvement of efficiency is expected to be achieved by synchronizing welding, painting, engine assembly and motorcycle assembly. The new plant will have two assembly lines – an integrated motorcycle/scooter line to be relocated from the existing plant and a new line dedicated to motorcycles. In addition, the building and lot for the new plant will be designed in order to accommodate future capacity expansion.
The existing plant was built by Guangzhou Motors Group Company in 1989, and has been expanded several times since Wuyang-Honda assumed operations in 1992, when the joint venture company was established. However, due to the rapid growth of production, which has doubled in the last five years and is expected to exceed 500,000 units in 2004, the existing plant was approaching its capacity limits. In addition to this capacity issue, the decision to relocate the plant related to environmental issues concerning surrounding areas that have been impacted by recent urbanization and to logistics and the supply of electric power.
Wuyang-Honda has been producing 100 to 125 cc motorcycles and scooters since 1992 and achieved the cumulative production milestone of 3 million units, June 22, 2004. The production plan for 2004 is 545,000 units, a 37.6% increase from 2003, with the company exporting more than 40,000 units to 36 countries, including the export of scooters to Japan.