Dongfeng Honda Automobile Co., a 50-50 joint venture between China’s Dongfeng Motor Corp. and Japan’s Honda Motor Co., broke ground on a new factory in central China Thursday.
The new factory in Wuhan, capital of Hubei Province, will produce passenger cars in 2019.
With investment of 5.5 billion yuan (800 million U.S. dollars),the plant is the third one to be built by Honda and Dongfeng.
The new factory will initially produce 120,000 cars a year, including new-energy vehicles. Its annual capacity will eventually increase to 240,000, according to a statement from Dongfeng Honda.
Auto sales in China strengthened this year as fresh models were released to attract young and middle-class consumers. Sales of Dongfeng-Honda grew 47.8 percent to 520,000 units in the January-November period thanks to the popularity of the XR-V sport-utility vehicle, the Civic sedan and the Elysion MPV.
The venture has raised its 2016 sales target twice to the current 560,000 units despite its annual capacity limits of 512,000 at the two current factories in Wuhan, which have been in production since 2004 and 2012.
Honda also has a joint venture with GAC Group called Guangqi Honda. Located in the southern city of Guangzhou, it produces the Accord sedan and the Odyssey MPV, to name but a few.
Honda aims to increase sales in China to 1.07 million cars this year. It sold 1.01 million vehicles in 2015, a 32.5-percent rise from the previous year.