Honda Automobile Overpowers Chinese Car Industry: Promises New Models
Proving itself yet again in the automotive industry, Honda Automobile has announced plans to launch at least five new models in 2020. Having a 50-50 joint venture, the Japanese carmaker Honda Motor and Chinese partner Dongfeng Honda Automobile would include mainstream petrol engine cars, pure electric vehicles and hybrids in near future.
Speaking about the upcoming development, Executive Vice-Manager of Donggeng Honda said, “We believe that opportunities arise in nuclear winter. We want to inspire ourselves to achieve a higher goal [in 2020].”
From January to October, the Wuhan-based carmaker sold 6,40,000 units, up 23.3 percent year on year. Just after setting up the third factory of its joint-venture that started operating in April, two ace models of Honda, the Honda Civic and the compact SUV CR-V, witnessed strong sales growth in this year.
Having the annual capacity of 2,40,000 units, Dongfeng Honda plans to sell 1 million cars a year in China. The other joint venture of Honda Ltd with Guangzhou-based GAC Group listed sales of 6,38,000 units in the initial 10 months of this year, up 7.2 percent from 2018. The long going US-China trade war has gradually slowed the economy and deterred the car sales in China for consecutive 16th consecutive months now. Because of the disturbed economy, the business outlook of carmakers has worsened and created a weak market demand.
The industry executives had expected the market to recover in the second half of this year, but things did not turn around. According to the China Association of Automobile Manufacturers, the mainland has reported passenger car sales of 1.93 million units in October, reaching down 5.8 percent year on year. In the January to October period, sales plunged by 11 percent to 17.17 million units.
An independent specialist in the manufacturing sector, Gao-Shen said, “Overall, the market outlook is bleak now that consumers are reluctant to spend on big-ticket items. A weak auto industry also drags down the overall economic growth.”
According to the China Passenger Car Association, in the initial months of the year, the Japanese brands boosted sales by 4.3 percent, leaving behind the US, European, South Korean and Chinese rivals. At a time when Germany is benefiting from resilient demand for its premium models, Japan is soon going to overtake Germany’s title of the biggest foreign car power in China.
In another news, racing teams, Red Bull Racing and Toro Rosso Formula One(F1) have announced the extension of their contract with Honda Automobile.
Earlier, it seemed that Honda Automobile was considering an exit from the sport, as the Japanese manufacturer wanted to see a draft of the 2021 regulations prior to making any future commitments. In such a situation, the announcement of the contract extension coms as a surprise for the analysts.
Of the two Red Bull-owned teams, Toro Rosso was the first one to switch to the Honda engine in 2018, Red Bull Racing team soon followed suit in 2019, by switching from Renault to Honda Automobile by signing a two-year deal till 2020.
If Honda continues to plan its future moves strategically in the coming future as well, it will surely give tough competition to car makers like Toyota and Nissan.
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