Japanese car giants hike capacity as demand surges

08:28, February 24, 2010      

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Japanese carmakers are increasing capacity in China to meet surging demand in the nation, which surpassed the United States as the world's largest auto market in 2009.

They were also buoyed by a rebound in the US auto sales, which gained for a third month in January. Output plunged a year earlier amid a global recession.

Toyota Motor Corp, Honda Motor Co and Nissan Motor Co increased global output in January as demand surged in Asia.

Global output at Toyota rose 56 percent to 643,925 vehicles from a year earlier, the world's biggest automaker said yesterday in a statement. Production at Honda Motor Co, Japan's second-largest carmaker, rose 28 percent to 290,752 vehicles, while Nissan, the third-largest, built 285,968 vehicles, up 97 percent, the companies said separately.

"The US market is showing signs of a recovery, and demand in China and other emerging markets will definitely rise in 2010," said Masatoshi Nishimoto, an auto analyst at CSM Worldwide in Tokyo.

Toyota's January production in China rose 204 percent to 67,337 vehicles, compared with a 157 percent increase to 98,183 vehicles in the United States. Higher output for Toyota comes even as the company's sales in January dropped 16 percent, dragged down by recalls of more than 8 million vehicles since September for problems including unintended acceleration. Toyota has said the recalls may cost about $2 billion in lost sales and warranty repairs.

Honda output

Honda Motor Co's global auto production rose in January as demand surged in China, the world's largest auto market.

Production in China rose 68 percent in January compared with a 39 percent rise in North America.

Global auto demand will "improve in 2010, due to a modest recovery in the US market and robust sales in emerging markets driven by China and India", Jeong Min-Pak, an analyst at Fitch Ratings said in a report last week. "Japanese firms are in a good position in light of the view that the worst has passed in the global automotive industry."

Industrywide sales of passenger cars, trucks and buses in China more than doubled in January from a year earlier to 1.66 million vehicles.

Honda's local venture with Dongfeng Motor Group Co said last month it will invest 1.15 billion yuan to build a second plant in China that will begin production in the second half of 2012. The factory's target capacity for Honda-brand vehicles is 240,000 vehicles a year.

The Tokyo-based carmaker will also increase production capacity at the venture's existing plant in Hubei province to 240,000 vehicles this year, from 200,000.

Mazda confident

Mazda Motor Corp, 11 percent owned by Ford Motor Co, plans to increase production capacity in China to meet growing demand.

"We need to expand current capacity when we look into next year and the year after," Chief Financial Officer Kiyoshi Ozaki said. Ozaki declined to say by how much the company planned to boost output capacity.

Hiroshima-based Mazda aims to boost China sales 22 percent this year as economic growth spurs demand.

The carmaker has a venture in China with Ford and Chongqing Changan Automobile Co, which operates two plants. Mazda also makes cars though its local partner FAW Car Co. In total, the Japanese automaker produced 173,788 vehicles in China last year.

Mazda aims to sell 220,000 vehicles in China this year, the company said in January. Third-quarter vehicle sales rose 68 percent in China last year.

Mazda's alliance with Ford will continue to be "pivotal", Ozaki said. "Ford needs Mazda and we need Ford." Still, Mazda is open to forming a partnership with other automakers for individual car development, Ozaki said.

Ford cut its stake in Mazda to 11 percent from 33 percent in 2008 as the Dearborn, Michigan-based carmaker sold shares to raise cash amid a credit crunch.

Mazda President Takashi Yamanouchi said earlier this month that the two companies reconfirmed their partnership when he met Ford CEO Alan Mulally at the end of last year and the two are jointly developing a product.

Mark Fields, Ford's president for the Americas, said on Dec 3 that the US carmaker intends to go it alone for future models after decades of developing vehicle platforms with the Japanese affiliate.

Source: China Daily
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