Honda Motor on Wednesday said it would set up a research and development unit in Shanghai to help expand its share of China’s rapidly growing motorcycle market, according to Reuters.

Honda Motorcycle R&D China Co Ltd will be established in Shanghai next month with $US17 million capital and start operations in April 2003, Reuters said, citing a Honda statement.

Honda and other Japanese motorcycle makers have been setting their sights on the booming Chinese and Indian markets as their home market shrinks, Reuters said.

China is the world’s largest motorcycle market and Honda already has several joint ventures there, the news agency added.

Honda’s statement said the new subsidiary will enable it to handle all operations from research and development to production at a local level, Reuters said.