Honda Motor said it plans to spend an initial 3.49 billion yuan ($522 million) on an electric vehicle (EV) factory in China’s Guangdong province.
The EV plant – a joint venture (JV) with Guangzhou Automobile Group – aims to start operation in 2024 with an annual production capacity of 120,000 units.
Honda said another EV plant in China, in a JV with Dongfeng Motor Group, is also expected to start operations in 2024.
The Japanese automaker projected its annual car production capacity in China to increase by about 16% to 1.73 million units in two years.
Honda has been eager to cement partnerships after shareholder criticism that its EV strategy was lagging behind other large manufacturers.
In April Honda announced an alliance with Sony to form a new JV in commercialising EVs.
The carmaker is teaming up with the electronics giant to develop service-oriented architecture such as telecommunications, networking, data and software for automotive infrastructure.
“Honda’s lagging position in these areas has been a concern for investors and this is a key reason for recent decline in its valuation,” said Takaki Nakanishi, an equity analyst with Jefferies in Tokyo.
“We believe the [Honda-Sony] alliance to provide a strong catalyst.”
- Reuters, with additional editing by George Russell
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