Japan's car-maker Honda Motor Co Friday started to ship its made-in-China cars to Europe with Germany as the first destination.

This is the first time cars have been exported from China to Europe.

Honda plans to export 10,000 units of the Jazz hatchback to Europe this year, it said.

The 1.2- and 1.4-litre Jazz is being made at Honda's joint venture in Guangzhou with the Guangzhou Automobile Corp and Dongfeng Motor Corp.

The Jazz will also be shipped to Italy at the end of this year, Honda said.

"Our export activities are based on the synergy of China's competitive advantages and Honda's global network," said Atsuyoshi Hyogo, chairman of the joint venture and head of Honda's operation in China.

The Jazz will be sold in Europe through Honda's networks there.

At the moment, Honda also exports Jazz cars made in Japan to Europe.

"Production costs in China, although a little bit higher than in Japan now, will be lower with growing volume within the next five years. We will take this advantage to export cars from China to Europe," Hyogo said.

Output of the joint venture in Guangzhou, named Honda Automobile (China) Co Ltd, will reach 50,000 cars in five years, he said.

Honda Automobile (China) Co Ltd, launched in 2003 with a registered capital of US$82 million, is the first totally export-oriented Sino-foreign car joint venture.

Honda controls a 65 per cent stake in the joint venture, Guangzhou Automobile 25 per cent and Dongfeng 10 per cent.

The local content rate of the Jazz cars made at the venture stands at more than 60 per cent as they share a lot of spare parts used by the Fit cars produced at Honda's other joint venture in Guangzhou with Guangzhou Automobile, or Guangzhou Honda.

Honda is one of the fastest-growing foreign car makers in China, where the car market has decelerated sharply.

The company's sales in China surged by 51.4 per cent year-on-year to 92,338 vehicles in the first five months of this year.

Guangzhou Honda also makes the Accord mid-sized sedans and Odyssey wagons.

Honda also runs a joint venture in Wuhan, capital of Hubei Province, with Dongfeng.

The venture produces the CR-V sport utility vehicles now and will introduce the Civic next year.

Sales of cars made in China totalled 2.3 million units last year, up 15 per cent from 2003.

The growth was down from more than 70 per cent in 2003.

Source: China Daily