Honda to Rollout Acura in China - Analyst Blog
23 July 2013 - 8:00AM
Zacks
Honda Motor Co. (HMC) plans to roll out Acura
cars in China within three years in order to tap the burgeoning
demand for cars by an affluent class of people in the world's
biggest auto market.
Honda is trying the produce the vehicle with a local partner
Guangzhou Automobile Group Co in order to avoid high tariffs
charged on imported cars in China. However, it has not yet revealed
any details regarding the size of production capacity or the model
it plans to produce.
However, a Beijing-based Honda spokeswoman revealed that the new
Acura in China would probably be a compact sports utility vehicle
(SUV) that has not yet presented by the company in the brand’s
product lineup. It could be based on a “concept” model -- the Acura
SUV-X -- that has been showcased at the Shanghai auto show in
April.
Apart from Honda, other prominent automakers such as
General Motors Company (GM) and Nissan
Motor Co. (NSANY) are focusing on new vehicle launches in
China. Recently, GM has begun producing Cadillac cars while Nissan
Motor is building a plant in the eastern city of Dalian to rollout
some models for its premium Infiniti brand.
After months of sluggish growth owing to weak economic conditions
and restrictions imposed by the government on new vehicles, total
vehicle sales in China reflected a steady growth of 11.2% in Jun
compared with 9.8% in May, according to the China Association of
Automobile Manufacturers (CAAM).
A total of 1.8 million vehicles were sold in the country during the
month, leading to sales of 10.8 million vehicles for the first half
of the year, up 12.3% on a year-over-year basis. Passenger vehicle
(cars, multipurpose and sport-utility vehicles) sales also
increased steadily by 9.3% to 1.4 million units in Jun compared
with 9.0% in May. For the first half of the year, passenger vehicle
sales rose 13.8% to 8.7 million units.
The steady growth in sales was mainly attributable to lower prices,
which partially offset the effect of shortage of credit, weak
economy and government restrictions on vehicle registration due to
increasing traffic congestion and pollution in Chinese cities.
Currently, shares of HMC retain a Zacks Rank #5 (Strong Sell).
Among the Japanese automakers, Fuji Heavy Industries
Ltd. (FUJHY) with a Zacks Rank #1 (Strong Buy) is
performing well.
FUJI HEAVY ADR (FUJHY): Get Free Report
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