Honda Motor Co., one of the only automakers shipping Chinese-made cars to Western markets, is loosing its enthusiasm for China as an export base.

 

Exports of the Jazz, known as the Fit in the United States, have plunged 50 percent so far this year, Honda's China head Atsuyoshi Hyogo said April 20 at the Shanghai motor show.

 

Honda began shipping the car to Europe in 2007 from its factory in Guangzhou. About 90 percent of the car's parts are locally sourced, and the venture is seen as an experiment in replicating Honda's manufacturing process and quality in a low-cost country.

 

Now the model is being challenged by slumping demand overseas, creeping costs in China and expectations for a rising Chinese yuan, which will undermine returns on exports.

 

"It's harder, not easier," Hyogo said of using China as an export hub.

 

Hyogo said plans to expand shipments from China are on hold for "a couple years" until the economy recovers. At that point, plans will be reassessed. Future possibilities include broadening exports to another model, but Hyogo did not say which vehicle.

 

Hyogo added that that Japanese carmaker is not considering Chinese exports to the United States because there is already ample production capacity there.