The factory would have a production capacity of 120,000 vehicles a year, Honda said in a statement.
Honda, Japan’s second-largest automaker, is set to launch a new EV brand in China this year called e:N Series with plans to roll out 10 models with partners Dongfeng and GAC.
Like many carmakers, Honda has been hit by a semiconductor shortage. Production in the second quarter of 2021 was undercut by 360,000 units, higher than the company guidance of 120,000 units.
While Honda initially planned catch-up production of 265,000 units in the second half, the Japanese carmaker added further cutbacks of 500,000 units in October-December, posting a net decline of about 650,000 units.
“However, earnings weakened less than feared,” noted Takaki Nakanishi, an equity analyst at Jefferies in Tokyo.
Honda has been boosting its tech partnerships in recent months, such as voice-assisted parking in China. Drivers can pay for their parking through Parkopedia, which partnered with telematics technology firm MXNavi.
New Honda Civic and Accord models can access an in-car voice assistant to provide drivers with nearby, available parking recommendations when approaching their destination.
- Reuters with additional editing by Kevin Hamlin