Honda’s Chinese venture to build own-brand cars

Honda’s alliance with China’s state-run Guangzhou Automobile Group will bear fruit to new models sold its own brand name. Currently, only Honda designed vehicles such as the Accord, Fit, Odyssey, and City models are built in the Chinese plants but this will change as more money is pumped into the joint-venture.

A new R&D center will be built at a cost of around US$250m. This new vehicle, which will be a unique product that incorporates various needs specific to the Chinese market, will be developed primarily by the R&D subsidiary of Guangzhou Honda while receiving support from Honda R&D. To market this vehicle, Guangzhou Honda plans to use an original Guangzhou Honda brand, which will be differentiated from the Honda brand. According to Honda prez Takeo Fukui, "it will be a low-priced car unlike anything Honda would sell on its own."

Chinese carmakers are becoming increasingly ambitious with their plans. Previously they were content to build models for the likes of VW and GM but now the biggest carmakers are also planning their own brand vehicles. Companies like SAIC and Dongfeng will be introducing new models in the near future that could eventually make their way overseas.