Honda Goes Into Crowded China Market

Honda (NYSE: HMC) is the latest multinational car company to attack China’s vehicle market.  People’s Republic drivers bought 18 million cars and light trucks last year, well ahead of the 12.5 million sold in the US–the No. 2 market.

But, the growth of sales in China has disappeared, primarily due to the end of an incentive program set by the central government. Global manufacturers will have to content to compete with a large, but no longer fast-growing pie. Honda says it will offer 10 new models in China by 2015.

The Japanese company can be added to a dozen others like Nissan and Ford (NYSE: F) which expect tremendous gains. Each will have to gain market share in a market dominated by GM (NYSE: GM), VW,and increasingly aggressive local companies. Honda may want to double sales, but it has nothing other than projections which are nearly impossible to support.