Associated Press (AP) reports that Honda has applied to take a majority stake in its planned carmaking joint venture in Guangzhou.
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Citing as source a Chinese government official, the report notes that it would be unprecedented for a foreign maker to have a majority share in a Chinese carmaking joint venture.
AP says that Chinese regulations limit foreign JV participants to a maximum 50% stake in automobile manufacturing joint ventures.
Honda announced in July that the planned JV plant in Guangzhou would be set-up as a major base for exports to Asia and Europe, raising more than a few eyebrows in the automotive community. Most car assembly plants are created in China to supply the local market only and doubts persist about the quality of vehicles produced in China.
The export plans for the plant may swing Honda the concession on its stake from the government. By holding a majority stake the company would have more control over the organisation and future development of the facility.
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By GlobalData
Honda’s partners in the joint venture are Guangzhou Auto Group Corp. and Dongfeng Motor Corp.
