| TOKYO, Japan - Honda Motor (China) Investment, a wholly-owned Honda subsidiary, has plans to establish Honda Auto Parts Manufacturing, a powertrain components production company, in China.
The new plant, located Foshan City , Guangdong Province, will initially accommodate machining and assembly of transmissions and drive shafts as well as machining of crankshafts and connecting rods for engines. The machining of gears as well as production of control parts, both key high value transmission components currently supplied from Japan , will be added at a later date. Local production of these components enables Honda to secure an adequate supply to support expansion of Honda's car production in China , and also to further increase local content of powertrain components, which will help facilitate cost reduction and strengthen Honda's competitiveness in the market.
Currently, transmissions, drive shafts, and other engine components such as crankshafts and connecting rods supplied to these plants are being locally manufactured by Honda's existing engine and parts production joint venture companies. The new company will share roles and work in a complementary way with the existing parts production companies in order to expand local production of powertrain components.
Currently two Honda joint venture companies - Guangzhou Honda Automobile and Dongfeng Honda Automobile - are manufacturing car products for the domestic market, while Honda Automobile (China) manufactures cars for export. However, in order to continue to meet growing demand in China , both Guangzhou Honda and Dongfeng Honda are currently undertaking further expansion of production capacity.
Overall annual production capacity of Honda's three joint venture plants will reach 530,000 units by the latter half of 2006 - 360,000 units at Guangzhou Honda, 120,000 units at Dongfeng Honda and 50,000 units at Honda Automobile (China).
The new plant will be Honda's fourth major automatic transmission plant in the world after Ohio in the US , Indonesia , and Georgia in the US , which is currently under construction. By adding this new plant, which plans to begin production in spring 2007, with initial production capacity of 240,000 units per year, Honda will strengthen its transmission supply capability to support worldwide car production.
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