TOKYO (Bloomberg) -- Honda Motor Co. plans to resume full operations over the next several hours at a parts plant in China after a strike at the factory shut down all its production in the country.
Honda hasn’t decided when to reopen its four car-assembly plants in China, said Akemi Ando, a spokeswoman for the Tokyo- based company. The factories closed last week as they ran out of components after workers at the parts plant walked out, demanding higher pay. The plants will remain shut at least until Thursday, Ando said.
The maker of Accord and Civic cars may be losing production of as many as 3,000 vehicles a day because of the shutdown in the world’s biggest automobile market, analysts said. The strike is a sign that automakers can expect rising labor costs in China, according to analysts including Satoru Takada at Toward the Infinite World Inc. in Tokyo.
The automaker shut two plants in Guangzhou, Guangdong province, on May 24 and factories in Guangzhou and Wuhan, Hubei province, on May 26 after workers making transmissions and engine parts at Honda Auto Parts Manufacturing Co. in Foshan, Guangdong, walked out on May 17. It is the first time a strike has stopped Honda’s local auto production, the company said.
All workers showed up for the first shift at the parts plant early Wednesday, said Takayuki Fujii, a Beijing-based spokesman for Honda. He said it may take some time to restart production lines as workers need to check machines.
Honda produces about 3,000 vehicles a day in China, according to Koji Endo, a Tokyo-based analyst at Advanced Research Japan. The closed factories, joint ventures between Honda and its Chinese partners, make models including the Accord sedan and Civic compact and have combined annual capacity of 650,000 units.
Restarting the assembly plants may take one to two days once full production resumes at the parts factory, Honda has said.
China accounted for 17 percent of Honda’s global sales last year, and the brand ranked fifth in China by unit sales in April, according to J.D. Power & Associates. Honda may increase China sales 9 percent to 630,000 vehicles this year, CEO Takanobu Ito said last month.
Honda plans to raise production capacity in China by 28 percent to 830,000 vehicles a year by the second half of 2012 and introduce two new models as car demand grows in the country, Ito said in Guangzhou on May 25.
Auto sales in China may rise 17 percent to 16 million this year and annual demand may climb to more than 30 million, according to an official at the State Information Center.