This report provides sales data and model strategies of Honda Motor Co., Ltd. in China and outlines recent developments on the company's creating a new research and development organization in the country. Recent developments on Honda's production operations in China will be reported in the next report on Honda China.

  Honda's performance is a reflection of (1) a one-time, sluggishness due to the company's delayed response to the shift in demand for compact cars in the Chinese passenger car market, (2) a decline in sales of the company's local strategic vehicles such as the Accord, and (3) the adverse effects of anti-Japanese demonstrations in China. In 2013, the company's performance rapidly recovered. The sales volume in China increased by about 24.4% on a year-over-year basis (y/y) to 781,000 units (factory shipment basis, exports included, imports excluded). On the other hand, the company's sales results for the period from January through July 2014 showed a little more than a 5% increase y/y. The rate of increase fell slightly.

  In addition to development support centers in Guangzhou and Wuhan, Honda established Honda Motor China Technology Co., Ltd. in Guangzhou in November 2013 to step up its research and development efforts in China.

  Honda is introducing at least 10 new models, including fully redesigned models, from 2013 to 2015 in order to reinforce its product lineup in China. Moreover, the company is planning to start local production of the Acura-brand models by 2016.

Related Reports:

◇Honda China (Part 2)：recent movements for production enhancement (Coming soon)

◇Beijing Auto Show 2014:
    (1) Honda unveils Hybrid Concept B and Acura RLX SH-AWD (May 2014)
    (2) Honda: All-new Spirior concept, Vezel and 3rd-generation Fit (May 2014)

◇Honda's strategy to expand in Asia by developing cars for local markets (May 2014)

◇Honda's China production increased to meet 2015 projections (May 2013)