Honda Motor has set up a wholly owned sales and after-service unit in Moscow to boost demand for its cars in the fast-growing Russian market.

Reuters said Japan’s second-largest car maker aims to sell 4,800 cars in Russia this year, which would represent a 34% jump from 2003.

Honda told the news agency the Russian car market has grown from around 900,000 units in 2000 to 1.2 million last year, and is set to expand even more due to a reduction in sales tax.

Honda imports the Civic compact, Accord sedan and CR-V sport utility vehicle, among others, from its British and Japanese factories for the Russian market, Reuters said, noting that the company’s presence is tiny compared to domestic rivals Toyota Motor and Nissan Motor, which in 2003 had sales of around 25,000 units and 9,500 units, respectively.

Honda Motor RUS LLC, formed in February, is capitalised at about $US1 million and has a workforce of about 30, Reuters added.