Honda predicts 'satisfactory' sales

Honda predicts 'satisfactory' sales

KUALA LUMPUR (AFP): Japanese automaker Honda said Monday it will post "satisfactory" sales growth in Southeast Asian countries this year despite a slowdown in their economies.

"I see positive and satisfactory growth in Honda sales in the ASEAN economies despite the economic slowdown," said Mitsuru Ozaki, managing director of DRB-Oriental-Honda Sdn Bhd, a joint venture between Honda and two Malaysian firms.

Ozaki said Honda expects to see a 45 percent surge in sales in Malaysia, its largest Southeast Asian market, to 8,000 vehicles this year from 5,500 in 2000. A further rise to 12,500 vehicles is expected next year.

Ozaki said the company was looking forward to the reduction of import duties in Malaysia under a regional free trade deal from 2005.

"Duties currently make up 42.5 percent of every unit," he said.

Under the proposed Association of Southeast Asian Nations (ASEAN) Free Trade Area agreement, ASEAN's six original members must cut tariffs on most imports to a maximum of five percent by 2003.

Last year Malaysia won a two-year delay for its heavily- protected auto sector.

Malaysia, Thailand, Indonesia, Brunei, the Philippines and Singapore are the original six ASEAN members. Newer members Laos, Cambodia, Myanmar and Vietnam have been given longer to cut tariffs.

Abdul Rashid Rahim, the local joint venture's chief operating officer told reporters that construction work on a 170 million ringgit (44.7 million dollar) assembly plant in Malaysia would begin in September.

Manufacturing at Alor Gajah in the southern state of Malacca would start in early 2003 with a capacity of 20,000 vehicles a year. It would produce the City, Civic, Accord and CRV models for Malaysia and other Southeast Asian markets.

Vehicle assembler DRB-HICOM Bhd, local Honda distributor Oriental Holdings Bhd and Honda Motor Co. signed a joint venture agreement last November to produce and distribute Honda cars and spare parts.

DRB-HICOM has 36 percent and Oriental Holdings 15 percent, with Honda Motor holding 49 percent.