HONG KONG -- The Chinese carmaking joint venture of Denway Motors Ltd. and Honda Motor Co. said Monday that it planned to sell 15 percent more vehicles in 2005 despite fierce competition.
Guangzhou Honda, which is 47.5 percent held by Denway and 50 percent by Honda, forecast that it would sell 230,000 units this year, according to a statement on its Web site.
It also forecast revenues would rise by about 9 percent in 2005 to $4.35 billion.
The joint venture, which makes the Accord sedan, the Odyssey minivan and the Fit subcompact in Guangzhou, said business conditions last year were the most challenging since it was set up six years ago. But it managed to achieve its sales target of 200,000 units in 2004.
It sold 202,000 vehicles last year and recorded revenues of $32 million, up 73 percent and 48 percent, respectively, from 2003. Profits before taxes rose 45 percent to $10 million, the company said.
Previous sharp growth in China's auto industry slowed dramatically last year after Beijing tightened credit and cracked down on rapid investment in industries believed to be overheating, such as the automotive sector.
"There are still a lot of problems in the auto market, including oversupply and falling sale prices," said Alex Fan, an analyst at Daiwa Securities.
Guangzhou Honda said it would invest $2 million in 2005 in its existing plant and the construction of a second plant, which will increase its capacity to 360,000 units in 2006 from 240,000 at present.