Honda decided to increase production of units of the 2019 Acura RDX in its China plant instead of importing the luxury vehicle from the United States.
Honda Motor will begin market rollout of the Acura RDX by the end of 2018 and with the decision, the company expects China-made units will make the SUV model 20 percent less expensive than its predecessor which was sold at about $57,400 price tag.
The Japanese carmaker also believed that having the new SUV model produced in China will make its cost more competitive in the market. Ultimately, the move will also make the Chinese market more receptive of the Acura RDX.
Honda sold 1.45 million units in China as of March. This was about 30 percent of Honda's worldwide unit sales. The Asian superpower has also been Honda's second largest production country next to the United States.
The production of the new Honda SUV model had in fact started in July at a facility in Guangzhou, Nikkei Asian Review reported. Now the Japanese automaker will amplify the original number of units that were to be produced in the facility.
The move is also Honda's way to avoid the 40 percent tariffs on vehicles imported from the United States as a result of the ongoing China-US trade war.
In July, Beijing lowered the tariffs on imported vehicles to 15 percent from 25 percent. This action from the government, however, excludes all cars manufactured from the United States. Instead, levies on cars manufactured in Washington were raised to 40 percent, mirroring the step made by the Trump administration.
Honda has all the means to produce cars in China since the company has ongoing two joint ventures with Guangzhou Automobile Group and Dongfeng Motor Group.
In October, Honda announced its summary of automobile production and a number of exports for the first half of fiscal year April 2018-March 2019 and the month of September 2018. The Japanese carmaker has also set a record high production for the first half of fiscal years, including the previous consecutive seven years.
Honda stated at that time that it achieved a record high production in Asia and China. It produced 740,181 units in Beijing which was a 2.6 percent increase compared to its last quarter production. On the other hand, the company's production in the United States decreased by 1.1 percent with a total of 581,988 units.
Meanwhile, Honda Motor joint venture with GAC Group has been planning to invest $469 million in electric vehicles produced in China, Reuters reported. The venture will see the construction of a new facility that can produce as many as 170,000 electric vehicles per year.
