Honda is forecasting record global car sales for 2003 and plans to more than quadruple its Chinese production capacity to keep up with rising demand, the industry newspaper Automotive News said on its website.
Honda expects global automobile sales next year to rise 10 percent from this year to about 3.1 million units, Automotive News said.
The newspaper said Honda’s announcement came just one a day after rival Toyota forecast a 5% rise in total vehicle sales to a record 6.5 million units in 2003, bucking an underlying lacklustre trend in the global car market.
Automotive News said that Honda’s solid outlook was significant because the company expects a weak global economy to push overall car demand down next year.
According to Automotive News, Honda President Hiroyuki Yoshino told a news conference: “With the exception of Asia, I expect (global car demand) to be softer next year.”
Yoshino expects the key US car market to inch down to the low 16-million-units level, and the European market to also fall slightly from this year, Automotive News said.
But, the report added, Honda is aiming to boost sales in the United States by 10% from this year to about 1.35 million units in 2003.
To keep up with an expected jump in overall demand, Honda plans to boost its global production by 10.8% next year to 3.19 million, with much of the expansion in Asia, where demand for cars has been growing at high rates, Automotive News said.
According to Automotive News, Honda said it would raise annual capacity at its Chinese joint venture, Guangzhou Honda Automobile Co., near Hong Kong, to 240,000 units by spring 2004 from 50,000 now.
Automotive News said that Guangzhou Honda, owned equally by Honda and Guangzhou Auto Group Corp., would invest an additional $80 million for the expansion, which will also create 1,000 jobs to bring total employment to 3,400 by 2004.
In addition, Automotive News reported, Honda would also begin building its popular CR-V SUV in Taiwan next month, with output volume of 20,000 units planned in the first year.
Production would also begin at new factories in Malaysia and Indonesia early next year, Automotive News said, while capacity would be boosted at Honda’s Thai plant from 70,000 to 120,000 by mid-2003 and assembly of the hot-selling Jazz (Fit) subcompact would begin in Brazil next spring.