Honda is to build a new automobile manufacturing facility in Vietnam.
Honda Vietnam has been granted permission by the Vietnamese Government to build a new automobile manufacturing facility as well as establish a new dealer network in the country.
The company plans to start producing Honda Civics in the new plant, which will have the capacity to produce 10,000 cars per year, by mid- 2006.
The automobile market in Vietnam has been growing rapidly over the past few years, and reached 40,000 units in 2004, although sales over recent months have slowed due to the introduction of a luxury tax on cars.
Honda Vietnam began motorcycle production in Vietnam in December 1997, and last year, its sales in the country reached 500,000 units. The motorcycle market in Vietnam has become the third largest in the region after Thailand and Indonesia.
Honda Vietnam itself is a joint venture of three partners: Japan’s Honda Motor, which holds 42% of the capital, Asian Honda Motor, which holds 28%, and the Vietnam Engine and Agricultural Machinery Construction Corporation, which holds 30%.
At present, eleven joint-venture companies are licensed to manufacture cars and 160 companies are allowed to make car parts in the country.