Toyota, Nissan Boost Global Output on China Sales

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Jan. 25 (Bloomberg) -- Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. increased global production in December as automobile demand surged in China and U.S. sales recovered.

Output at Toyota rose for a second month, gaining 33 percent from a year earlier to 636,102 vehicles, Japan’s largest automaker said in a statement today. Honda Motor Co., the second-biggest, increased production 3.4 percent to 286,826, while output at Nissan Motor Co., the third-largest, surged 54 percent to 271,289, the carmakers said in separate statements.

Nissan and Honda’s Chinese factories are running at full capacity 24 hours a day to meet demand in the nation, which surpassed the U.S. as the world’s largest auto market in 2009. Japanese carmakers were also buoyed by a rebound in U.S. auto sales, which gained for a second month. Output plunged a year earlier as the global economy entered a recession.

“The Chinese and U.S. markets are driving Japanese carmakers’ production gains,” said Masatoshi Nishimoto, a Tokyo-based analyst at auto consulting company CSM Worldwide. “China’s long-term growth potential is prompting them to make aggressive capital investments.”

Industrywide sales of passenger cars, trucks and buses in China surged 92 percent in December from a year earlier to 1.4 million as the nation’s economic growth and government incentives spurred auto demand.

U.S. vehicle sales rose 15 percent last month to 1.03 million, with Toyota’s sales surging 32 percent. In Japan, government tax cuts and subsidies for fuel-efficient vehicles helped boost industrywide demand 37 percent.

Chinese Ventures

Honda’s Chinese venture with Dongfeng Motor Group Co. said last week it will invest 1.15 billion yuan ($168 million) to build a second plant in the country that will begin production in the second half of 2012. The factory’s target capacity for Honda-brand vehicles is 240,000 vehicles a year.

Tokyo-based Honda will also increase production capacity at the venture’s existing plant in Hubei province to 240,000 vehicles this year, from 200,000.

Nissan is spending 5 billion yuan to expand a plant in China’s Guangdong province to increase production to 600,000 vehicles annually from 430,000. The Yokohama-based company is also spending 1 billion yuan on a light-commercial vehicle factory in the eastern city of Zhengzhou that will open this year and build up to 120,000 vehicles a year.

Buoyed by government incentives, Toyota’s Prius hybrid was Japan’s best-selling model in 2009, beating Suzuki Motor Corp.’s WagonR minicar, which had held the title for five consecutive years.

Bloomberg