TOKYO -- Honda Motor will start assembling hybrid vehicles in China, part of efforts to beef up its green offerings in response to tightening emissions regulations.
Chinese emissions regulations are expected to be as strict as those of developed countries by 2020. The average fuel economy of new autos likely will have to be 20km per liter of gasoline.
To boost market share in midsize and larger vehicle segments while meeting such stringent standards, Honda decided it is essential to increase its lineup of environmentally friendly vehicles while curbing costs. As an initial step, the Japanese automaker will start building a hybrid version of the mainstay Accord midsize sedan that will debut around this summer.
Local joint venture Guangqi Honda Automobile will handle production, with key components such as motors and batteries shipped from Japan for the time being. Prices have yet to be set, but the plan is to keep them no more than 10-20% higher than gasoline-engine versions.
Honda also plans local production of a hybrid sport utility under the Acura luxury brand to roll out exclusively in China starting as early as this year. In fiscal 2016, Chinese production of the two hybrids is expected to total 20,000 to 30,000 units. The automaker also intends to introduce plug-in hybrids, which it expects will qualify for subsidies, around 2020.
Previously, when Honda sold a hybrid version of the Fit subcompact built in Japan, sales were limited due to the high price of about 180,000 yuan ($27,378) -- more than double that for a gasoline-engine car made in China.
In hopes of catching up with Toyota Motor, which is strong in hybrids, Honda will increase its own hybrid offerings while curbing costs via local production, aiming to make the vehicles account for half of new-auto sales in China in 2020 and beyond.