Honda aims to boost Europe ops with China-made small cars

Honda Motor Co aims to reinvigorate its European automobile business, with plans calling for the release of a 1.3-liter upmarket car to be produced in China to help turn the firm's business in the region profitable in fiscal 2003, the Nihon Keizai Shimbun reported, citing company sources as saying.

The small auto will be based on the Fit subcompact, which has proved successful in Japan. The car, featuring a deluxe interior, will be released in Europe and Japan almost simultaneously.

Honda will export to Europe most of the output at its plant in Guangzhou, China, due to start operations in 2004. The facility will have an annual production capacity of 50,000 vehicles.

In autumn, Honda will also release in Europe its flagship sedan, the Accord, to be followed by the debut of a diesel engine-powered Accord next year. Honda hopes these new autos will help expand annual sales in the region to 350,000 units from the current less than 200,000 units.

The automaker also plans to operate its UK plant, which now turns out 250,000 units a year, at full capacity by the end of this year. It will use low-cost key parts made in China and other Asian countries, such as transmissions and engine parts, for the Civic subcompact being made at the UK facility, the sources said.