Japan's Honda Motor Co, the world's largest motorcycle maker, said both its motorcycle production and sales in China are expected to grow by one-third this year.

The company will have produced 1.15 million motorcycles this year in China, up 38 percent from last year, Honda said in a statement.

Honda's motorcycle sales in China are expected rise 34 percent to 930,000 units this year.

The company said its motorcycle exports from China will reach 220,000 units this year, an increase of 29 percent from 2003.

Honda predicted its global motorcycle sales will grow by 23 percent to 10.7 million units this year.

Honda now runs three motorcycle joint ventures in China with local partners Shenzhen-listed Hainan Sundiro Motorcycle Co Ltd, Guangzhou Automobile Group and Shanghai-listed Jialing Industries Co Ltd.

The venture between Honda and Guangzhou Automobile, in South China's Guangdong Province, will lift its annual production capacity to 700,000 motorcycles in the spring of 2006 from 500,000 units at present with an investment of 200 million yuan (US$24.2 million).

Honda said its wholly-owned subsidiary Honda Motor (China) Investment Co Ltd, established at the beginning of this year, will set up a branch in Shanghai next spring to "strengthen its regional motorcycle business in China."

The Shanghai branch will be responsible for making product plans in China, Honda's motorcycle business and supporting its joint ventures in marketing, services, quality and sourcing, Honda said.

Other Japanese motorcycle groups, such as Yamaha and Suzuki, have also built a strong presence in China which ranks No 1 in both motorcycle production and demand.

Yamaha aims to produce 1 million motorcycles in China by 2005 and increase output to 4 million units by 2010 through collaborations with local partners.

The nation's motorcycle output is expected to reach 17 million units this year, up from 14.7 million units last year, an official from the China Association of Automobile Manufacturers told China Daily.

Motorcycle output and sales in China climbed by 18.06 percent and 16.98 percent year-on-year to 15.54 million units and 15.50 million units in the first 11 months of this year, according to statistics from the association.

The nation exported about 3 million motorcycles during the period, up more than 30 percent from a year earlier.

However, analysts say China's motorcycle industry remains fragmented and less competitive in development capabilities and technical innovation.

At present, there are more than 120 motorcycle manufacturers in China.

(China Daily December 27, 2004)