Honda decides to postpone the local Chinese hybrid production

According to the company official, Honda is endeavoring for an effective cost saving method in order to match up to its major rival company Toyota, which is implementing cost saving measures. Honda had all intentions to initiate the local manufacturing of the hybrid cars in China by the beginning of the year 2014.

The company official revealed on 14th of June that the local Chinese production of the hybrid cars had been postponed to three years time, as the Japanese car major is trying to source cheaper components from the parts suppliers in China, so that the overall production cost of the hybrid cars can be reduced. If the Japanese car major is successful in sourcing cheaper auto parts, then it will be able to offer competitive pricing to the Chinese car consumers.

The Honda spokeswoman in Beijing, Natsuno Asanuma said that the affordability of the vehicles is a crucial factor for their success in the car market. Honda Motor has not provided any further details on the type of components that the company is looking to source more affordably. The company has also not revealed about any possibility of joint ventures with any Chinese company in order to source for cheaper auto parts.

The Chinese car market has been the globe’s largest car market since the year 2009, but the sale of the hybrid vehicles have been considerably low. However, this fact can change very soon, as Beijing is working to improve the subsidies on the hybrids in order to increase the sale of the new energy vehicles.

Honda’s decision in delaying the local production came right after its domestic Japanese rival company Toyota Motor Corp. declared last month that the company is trying to source the most important hybrid components in China so that the company can make hybrids more affordable for the car consumers. Toyota also revealed that the company is contemplating on a joint venture with a local Chinese auto parts supplier, in order to manufacture batteries more affordably for its gas-electric hybrid vehicles.

The auto makers are really working hard to produce affordable hybrid cars in China in order to make them more affordable and to drive the sale of these cars. Toyota along with the other global car manufacturing companies has taken the initiative to make the Chinese car consumers aware about the potential of the hybrid cars. The Chinese government is also contemplating to increase the subsidies of the hybrid cars in order to boost the sales of hybrid cars in China and thus, the auto makers are highly motivated to produce and promote the conventional hybrid cars.

Presently, the Chinese government offers generous subsidies for the battery electric vehicles and heavily electrified plug-in hybrids, but offers very limited support to promote the sale of the gas-electric hybrids.