Honda Vietnam to Increase Investment to Produce Cars

Honda Vietnam to Increase Investment to Produce Cars

Honda Vietnam (HVN), the largest motorbike maker in Vietnam, is seeking permission to raise its investment capital to US$209.2 million from the current US$151.2 million to manufacture cars of up to nine seats, according to a source from the Ministry of Planning and Investment.

The legal capital will be swollen to US$62.9 million from the current US$45.4 million, it said.

The capital contribution in the joint venture is still on 70:30 basis, with Vietnamese partners 30 per cent.

Honda Vietnam plans to build factories capable of turning out 15,000 automobiles per annum, a corporate official said, adding that the company will also produce auto parts and provide auto services.

Honda Vietnam expects to enjoy the benefits from the Vietnam-Japan Protection Agreement in manufacturing cars, in which Honda only needs to add 5 per cent of Vietnamese-sourced parts in their products by 2006.

Honda Vietnam is now only manufacturing motorbikes. It sold 566,000 motorcycles in the country last year, accounting for over 41 per cent of the market share.

• Investment