Honda Motor on Tuesday said it has established a wholly owned jet aircraft manufacturing subsidiary in Greensboro, North Carolina, to enter the global market for business jets.

Honda Aircraft is set to start mass-producing and delivering six- to seven-passenger jets dubbed ''HondaJets'' around 2010, Kyodo News reported.

Michimasa Fujino, president of the new subsidiary, said at a news conference in Tokyo that Honda will set the price of the jets at $US4m or less - he has led HondaJet development as chief engineer, the report noted.

Rivals' business jets retail for between about $4m and almost $35m on the global market, the report said, adding that global demand for compact jets has been about 600 to 700 units a year, about 70% of which is in the United States.

Honda's marketing efforts will initially focus on the US  but will extend to China and Europe in future.

Kyodo News noted Honda has described its expansion into the aircraft business as a long-cherished dream of founder Soichiro Honda - the automaker began aircraft research in 1986 and the prototype aircraft made its first test flight in 2003.

Honda has been selling engines for use in small jets since 2004 via a joint venture with General Electric, the report added.