Honda to build new engine plant in China

Japanese automaker Honda Motor Co. will spend about 270 million dollars to build an engine factory in China, a report said Wednesday.

Honda will build the new factory in the southern Chinese city of Guangzhou and start production in 2009 with capacity of 200,000 units a year, the Nikkei economic daily said without naming its sources.

The automaker plans to invest 30 billion yen (270 million dollars) in the new plant, which would increase its output capacity for automobile engines by 40 percent, according to the report.

The move would enable Honda to eventually double its production of finished automobiles in China to 700,000 units a year, it said.

Honda, the fourth-biggest carmaker in China in terms of production, aims to close the gap with top-ranked Volkswagen AG of Germany, it said.