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Electric cars in China

Honda to ramp up Chinese electric-car capacity in push with GAC

Japanese automakers plan expansions as quotas loom

A plug-in Honda Clarity at the Los Angeles Auto Show on Nov. 30, 2017. Honda Motor is increasing its production capacity for new-energy vehicles in China to abide by new local rules.   © Reuters

GUANGZHOU -- Japan's Honda Motor and partner Guangzhou Automobile Group will invest about 3.3 billion yuan ($477 million) to bolster production capacity for electric and other new-energy vehicles, hurrying to meet China's tightening requirements.

The Chinese automaker, known as GAC, said in a Wednesday stock exchange filing that a joint venture will add 170,000 units of annual capacity by building new facilities and remodeling existing ones. It did not say where the new facilities would be or when they would begin operating. The companies plan to make electric vehicles under GAC brands, Chinese media have reported.

"Nothing is set in stone," a Honda representative said.

Honda is producing its first electrics for the Chinese market this year at the joint venture's existing facilities. It also plans to start building electrics next year through Dongfeng Honda Automobile, a joint venture with Dongfeng Motor Group.

The Chinese government has said automakers must make electric cars and other environmentally friendly vehicles a certain proportion of their output from 2019. Companies missing the target will have to purchase so-called credits from rivals to make up the difference, or else may face limits on production of gasoline vehicles.

Nissan Motor began production of its first made-for-China electrics under its own brand this August through a joint venture with Dongfeng. Toyota Motor aims to manufacture in-house-developed electrics in China for sale starting in 2020.

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