Nissan & Honda plan to expand capacity in China

Japanese automakers Nissan and Honda both announced plans to expand their capacity in China last week, China Business News reported Monday.

The two Japanese carmakers produce cars in China through Dongfeng Nissan and Dongfeng Honda, their joint venture companies with Chinese partner Dongfeng Motors Corporation.

Nissan's capacity in China is expected to reach 560,000 units by the end of this year after 100,000 units are added to Dongfeng Nissan's current capacity of 460,00 units per year. Meanwhile, Honda plans to increase Dongfeng Honda's capacity by 20 percent to 200,000 units per year.

Nissan said the details of the expansions are still under discussion but a concrete plan will be formed by August.

Meanwhile, Honda has been preparing for its expansion since this summer.
"Businesses in China have been very important for both Nissan and Honda, as China is becoming their biggest market," an analyst said in an interview with CBN reporters.

As the upgrade plans are raised directly by Nissan and Honda, rather than their Chinese joint venture companies, CBN believes that the moves represent strategic thinking by the two Japanese carmakers amid this economic downturn.