BEIJING (Reuters) - Honda Motor’s (7267.T) joint venture with Dongfeng Motor Group (0489.HK) will invest roughly 3 billion yuan ($436 million) in a new factory in China, the Japanese automaker said in a statement on its website on Thursday.
The statement confirms a Reuters report in October that cited sources saying the automaker would build a new factory by 2019 with annual production capacity of 120,000 vehicles.
Honda has experienced explosive growth in China during the past two years despite an economic slowdown, luring consumers with strong new offerings in the rapidly growing sport-utility vehicle (SUV) segment. Honda sales have increased 28.3 percent year-on-year in the first 11 months of 2016, it said on Friday.
The Dongfeng Honda venture, one of Honda’s two JVs in China, is already nearing its capacity limits at its two existing factories, targeting sales of 450,000 vehicles for 2016 against current annual capacity of 480,000.
The plant will have capacity to build new energy vehicles, the Chinese term for battery electric or plug-in hybrid cars, the statement said.
($1 = 6.8786 Chinese yuan renminbi)
(Refiles to correct typo in headline, million not billion)
Reporting by Jake Spring; Editing by Stephern Coates