Source : Procurement Leaders

Honda is planning to increase its current levels of local sourcing as it looks to double sales in China by 2015, a move which could also see local design facilities being built.

According to reports on China Daily, at a recent news conference, Honda’s China chief Seiji Kuraishi said the company will be developing cars specifically for the Chinese market and will increase the numbers of components it buys from local suppliers in order to lower costs. He added that Honda would be introducing over 10 new and revamped vehicles into China from 2013 to 2015 as it looks to increase sales up to 1.2 million units.

At present, Honda have two joint ventures in place, one with Guangzhau Automobile Group in South China which has an output of 480,000 units and another with Dongfeng Motor Corp in Hubei that produces some 240,000 vehicles.

Honda’s sales in China have so far been behind rivals such as Toyota and the move is seen by many as a change in strategy.

Jenny Gu, senior analyst at LMC Automotive said, "The CR-V is at the end of its life circle and sales have dropped significantly. The Accord now has more strong rivals in the mid-sized sedan segment and also faces pressure from entry-level luxury vehicles".

In the first three months of the year, Honda reported a 10.6% year-on-year fall in China sales while Toyota’s sales were up 1.8%.