BEIJING - Japan's
number three automaker, Honda Motor Co, plans to
create a new brand in China through a local joint
venture to further tap the world's second-biggest
vehicle market.
Fu Shoujie, executive vice
president of Honda's partnership with Guangzhou
Automobile Corp, said the new brand will be an
indigenous one without the Honda logo.
"The new brand's intellectual property
will be held by the joint venture, instead of by
Honda alone," Fu told China Daily.
The
50-50 venture, Guangzhou Honda Automobile Co, will
announce a plan for the new brand later this month
or in April, he
said, declining to provide
details. He stressed that Guangzhou Honda is
expected to be the first major Sino-foreign car
venture to create a home-grown brand.
The
venture, based in the southern city of Guangzhou,
makes Honda's Accord mid-sized sedan, City compact
sedan, Fit subcompact car and Odyssey van.
John Bonnell, an analyst with Automotive
Resources Asia, a consulting firm owned by J D
Power and Associates, said it could be "monumental
news", as all major Sino-foreign car ventures only
assemble models under overseas badges.
"Guangzhou Honda seems to be working the
way policymakers intended. Government policy is
meant to develop independent automotive companies,
not companies that depend on the foreign
technology source in perpetuity," Bonnell said.
Government calls have been growing for
domestic automakers and their joint ventures with
foreign partners to speed up development of
indigenous brands to alter the scenario that
foreign marques now control three-quarters of
China's passenger car market.
The
government expects home-grown brands will account
for more than 60% of the market by 2010.
South Korean automaker Hyundai Motor Co's
joint venture with Beijing Automotive Industry
Corp said it also plans to launch a non-Hyundai
branded car in 2008.
Honda said it is the
right moment for its venture to develop a
home-grown brand. "The time is ripe for Guangzhou
Honda to do so as it has had a strong product
development and profit-making capability as well
as a big customer base," said Zhu Linjie,
spokesperson for Honda Motor (China) Investment
Co.
The venture announced in December that
it plans to set up a new research center to boost
its development capability with increasing
localization of auto parts. More than 80% of the
parts it uses are made in China.
Formed in
1998, Guangzhou Honda is one of the most
profitable Sino-foreign joint ventures. It posted
more than 5 billion yuan (US$645.6 million) in
2006 post-tax profit, according to industry data.
The venture aims to sell 310,000 vehicles
this year, up from 261,000 units in 2006. It has
an annual production capacity of 360,000 units.
Commenting on Guangzhou Honda's planned
home-grown brand, Zhang Xin from Guotai &
Jun'an Securities Co, said: "It should be a small
car, as Chinese customers still favor foreign
brands in the medium and high-end segments."
Honda also has a joint venture in the
central city of Wuhan with Dongfeng Motor Corp.
The venture's lineup includes the CR-V sport
utility vehicle and the Civic compact sedan.
The Japanese automaker's 2006 sales in
China totaled 323,469 vehicles, up 25.9% from the
previous year.
Meanwhile, sales of
China-made motor vehicles climbed a quarter to
7.22 million units in 2006, including 4.2 million
passenger cars.
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