Honda expects sales in China to rise 37% in 2006, according to Reuters, and is targeting sales of 353,000 units, including imports.

The automaker sold 257,000 vehicles in China in 2005, up 20% on a year earlier.

Its sales were up 43% in the first two months of this year to 37,629 vehicles, but volume is expected to slow when higher consumption taxes on large capacity engines take effect from 1 Apri.

To offset the slowdown, however,  Honda will launch the locally-produced Civic in April, and from the summer it will launch the imported Acura brand.