Manufacturing News

Honda, GAC Group to produce plug-in hybrids, EVs in China

Honda Motor Co.'s joint venture with GAC Group will invest 3.27 billion yuan ($469 million) to build a plant in China for production of electric vehicles and plug-in hybrids, GAC said.

The move is part of Honda and GAC's push to meet China’s stringent green-car quotas.

The plant will have capacity to produce 170,000 EVs and plug-in hybrids a year, GAC said Wednesday in a stock exchange filing.

A source close to the joint venture said the plan envisages Japan's Honda producing GAC's Trumpchi GS4, a battery-powered compact SUV, to sell through Honda outlets operated with GAC.

The Honda-produced vehicle is likely to be sold with the Trumpchi badge rather than Honda's, the source said, declining to be named because he is not authorized to speak on the matter.

It is an unusual arrangement but provides a quick way to meet Beijing’s requirements for such vehicles to represent 10 percent of an auto manufacturer’s production by 2019.

The deal is similar to an earlier one between Toyota Motor Corp. and its local partner. Toyota showrooms will sell an EV without the Japanese company’s logo. Instead, it will feature the label of its Chinese partner GAC and be built using GAC’s lower-cost technology.

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