Honda Motor announced its new investment in China to build its third automobile production plant worth 3 billion yuan ($436 milllion) in the country. The Japanese company will collaborate with Dongfeng Motor Group for the project. The announcement was made through a statement released on the company's website.

Like Us on Facebook

The latest announcement confirms the previous speculations doing round earlier this year. In October, Reuters reported that Honda plans to build a new factory by 2019. The production facility expects to have an annual production capacity of 120,000 vehicles.

Honda reported 28.3 percent year-over-year increase in its sales in the country. The company has experienced massive surge in its demand in China in the past two year. The automaker has also introduced a number of new models for sport utility vehicles.

The new Dongfeng Honda plant will be spread across 1.2 million square meter area. It is expected to be located 8 km southeast of the company's first plant in Wuhan Economic & Technological Development District. The new plant will also provide for the production of electric vehicles. China is expected to witness major increase in demand for electric vehicles in the coming years.

Takahiro Hachigo, President, Chief Executive Officer and Representative Director of Honda Motor, said "Honda sales in China is going strong and annual unit sales for 2016 is expected to reach 1.2 million units. The Chinese market has potential for further development and growth."

With this new plant, Dongfeng Honda will have an annual production capacity of 600,000 units, while Honda's capacity in China will rise to 1.25 million units. Its other two units are capable of producing 600,000 and 50,000 units, respectively.

TagsHonda, Dongfeng Honda, Wuhan Economic & Technological Development District