TOKYO, Dec 19: Honda Motor Co. on Wednesday unveiled plans to shift car part production out of Japan and import large numbers of vehicles into Japan from foreign factories to cut costs and boost its global competitiveness.

The move to cut costs and move production overseas came despite a forecast that the number three Japanese automaker’s domestic vehicle sales would rise seven per cent in 2002 to 920,000 from an expected 860,000 in the current year.

Honda also expects to sell 1.22 million vehicles in the United States next year.

In contrast, Japan’s top automaker Toyota Motor Corp. said on Wednesday it expected domestic sales to rise just two per cent to 1.75 million vehicles next year and overseas sales to rise one per cent to 3.55 million.

Honda said it would increasingly rely on other countries in Asia for spare parts.

“We have decided to make the Asian region a key supply station in our global supply network for parts,” Hiroyuki Yoshino, president and chief executive, told a news conference.

Goldman Sachs analyst Kunihiko Shiohara gave the plan a thumbs up. “They may not be able to turn a profit if they only make parts in developed countries, so deciding to go forward positively and utilize Asia is totally reasonable.”

The company also announced it would begin importing small passenger cars to Japan from a plant in Thailand starting in 2003, marking the first time a Japanese automaker has imported cars on a large scale for domestic sale.

The model has yet to be decided, said spokesman Makoto Nagatsuyu, but it would be a small car and would not be one of the four models currently produced there, the Accord, Civic, City and CR-V. Plans were going ahead to boost Honda’s production in China to 120,000 vehicles from 50,000 by March 2003 at a cost of over 10 billion yen ($78m).—AFP