BEIJING -- Honda Motor Co., which will export its China-built five-door Jazz to Europe early next year, has no plans to bring other vehicles manufactured in China to other markets.
"At this moment, we don't have any plan," said Sho Minekawa, president of Guangzhou Honda Automobile Co., a joint venture between Honda and Guangzhou Auto Group Corp. in Guangzhou. "We'll concentrate on the Jazz production for the European market because the European market is matured and competition is very severe."
Minekawa spoke Thursday here at the Automotive News China Congress.
Honda Automobile (China) Co., Honda's other joint venture in Guangzhou, builds the Jazz. The Japanese automaker plans to ship the Jazz hatchback to Europe in early 2005, replacing Japanese-built Jazzes.
Guangzhou Honda Automobile, launched in 1998, builds the Accord, Odyssey and Fit Saloon, a sedan based on the Fit, for China. It will add the Fit hatchback -- the same as the Jazz for Europe - to the Chinese lineup this fall. The plant has capacity of 240,000 a year.
"This is a major challenge - to build highly competitive products for exports markets," said Minekawa. But Honda will leap this hurdle by using Guangzhou's skilled work force, quality parts and cost competitiveness.
"Through our production operations, we have found that China has everything required to become a globally competitive market," he said.
The Fit Saloon, for example, has 80 percent local content, breaking the $12,180 price barrier in the economy car segment. Minekawa said he believes that a price of $12,160 for the compact sedan almost achieves a global cost standard. "It demonstrated the value of increasing local content to attain cost competitiveness," he said.
Minekawa said he is looking for synergy between China and export production through economies of scale and parts sharing.
Specifically, the Europe-market Jazz and the China-market Fit can share parts. So by leveraging economies of scale, Minekawa thinks, the compact car will achieve cost competitiveness.
"By sharing as much as possible, we will achieve high cost competitiveness," he said. Alternatively, Minekawa said, "this will increase customer satisfaction in China."