Honda Meets Demand in China

Honda Motor Co. said it has formed a joint venture between its Chinese affiliate and another local maker to meet growing motorcycle demand in China.

Honda said it reached an agreement with Hainan Sundiro Motorcycle Co. and Tianjin Honda Motorcycle Co. to form Sundiro Honda Motorcycle Co.

The Japanese company is taking a 50 percent stake in the new venture, which is to begin operating in April with initial capital of $99.6 million. Sundiro will own 47.3 percent of the new company, while Tianjin Honda will hold a 2.7 percent stake.

Honda, which sells 300,000 motorcycles a year in China, wants to offset declining demand for motorbikes at home by boosting sales abroad. The company hopes Sundiro's marketing experience and sales network will help it benefit from China's demand for motorcycles, which is expected to surge in the next few years.

Honda's sales in China should reach 1 million motorcycles by 2003, the Nihon Keizai newspaper said today without citing sources. In Japan, motorcycle sales have fallen from a peak of about 3 million units in 1983 to just 800,000 in 1999.

Get in your Inbox
Danielle Grossman
Danielle Grossman

More by Danielle Grossman

Join the conversation