Honda teams up with GAC to operate in China

KUALA LUMPUR: For any foreign auto manufacturer to operate in China, it is required to enter into a joint venture with a local company. And that’s the reason why we see names like BMW Brilliance, SAIC-Volkswagen, or FAW-Toyota for that matter. As for Honda, it has saddled up with GAC to operate in China.

Recently, GAC announced that it has taken over Honda’s export production operation in China. To clarify, this does not mean that GAC will take over Honda’s other joint venture,i.e., Dongfeng-Honda. It merely means that GAC now has greater control over Honda’s operation in China. The new entity will now be known as Guangzhou Development District Factory of GAC Honda.

When Honda first set its foot in China, it intended to manufacture cars for export and not for local consumption. The Japanese automaker than joint hands with GAC and Dongfeng to built vehicles for the local market. The Honda Automobile China is the entity that exports cars to Africa, the Middle East, and Russia. Initially, GAC owned a 25 percent stake in Honda Automobile China, while Dongfeng only had a 10 percent stake. Now, GAC owns 100 percent shares in Honda’s export unit.

Under the new arrangement, the GAC-Honda assembly line will now manufacture the 9th gen Accord. Besides, Honda City’s export to Mexico will continue. As for Dongfeng and Honda’s partnership, the current status is unknown.

GAC Honda currently manufactures the 9th gen Accord, HR-V, Jazz, City, and Odyssey. For the Chinese market, it assembles the Crider, Avancier, and Breeze. The Chinese market Acuras (Honda’s luxury vehicle division) is also built by GAC, namely the TLX-L, CDX (based on HR-V), and RDX (CR-V platform).

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