Honda Motor reportedly is investing 28 billion yen ($US265 million; €205 million) to build a fourth factory in China, part of the Japanese automaker's plan to nearly double annual production capacity in the country by 2006.

The plant, a joint venture with Guangzhou Auto Group Corp., will begin operating in the latter half of 2006 in the southern city of Guangzhou with an annual production capacity of 120,000 vehicles, Honda said on Tuesday, according to the Associated Press (AP).

AP noted that the announcement comes a day after the Tokyo-based automaker said it would quadruple production and add the Civic model line to the output of  another of its Chinese assembly plants [a joint venture with Dongfeng Motor], which currently produces the CR-V sport utility vehicle. Capacity there will rise to 120,000 by 2006.

Honda has a third plant that builds the Accord sedan, Odyssey minivan and Fit [Jazz] subcompact in a factory in the southern city of Guangzhou with a production capacity of 240,000 vehicles per year, the report said.

It is also building another factory especially for exports in a separate venture with Guangzhou Auto Group and Dongfeng Motor that will be capable of producing 50,000 vehicles a year, AP added.

The expansion will bring Honda's total annual output capacity in China to 530,000 vehicles, up from 270,000 now, the company said, according to the Associated Press.

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