CHINESE MADE HONDAS TO EUROPE

Honda to up exports from China

3 June, 2007

BY OUR AUTOMOBILE CORRESPONDENT

Japanese major Honda Motor Co plans to export 70 per cent more China-made cars to Europe this year. Currently, Honda sells the China-made Jazz cars in 10 European countries, including Germany, Italy, the UK and France. The Jazz cars will also be marketed in Czech Republic and Poland this July.

The company is apparently in a bid to take advantage of low costs in the world's No 3 vehicle producing country, a report said. The report added that Honda Motor Co will ship as many as 42,000 Jazz subcompacts assembled at a joint venture in Guangzhou to Europe this year. This will be up from 24,600 units in year 2006.

Honda became the only foreign carmaker to have a totally export-oriented car base in China when it formed the 50,000-unit venture in 2003 with $82 million of registered capital. The company holds a 65 percent stake in the venture.

Compared to Japan, the company said it enjoys low costs in China. The joint venture uses the spare parts supply networks of Honda's other car venture with Guangzhou Automobile, which targets the Chinese market, and an engine plant with Dongfeng. Sixty percent of spare parts in the 1.2-and-1.4-liter Jazz cars are purchased in China, the report said.

Europe is seen as one of the world's most demanding car markets and the Jazz is well received there proving that China-made cars can be high quality.

Many an indigenous carmaker in China are boosting exports of late. Last year, Brilliance China Auto, in partnership of BMW, started selling its own-brand cars in Europe. According to statistics, China's vehicle exports surged by 59 percent to almost 100,000 units in the first quarter of this year, including 25,000 cars.

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