Japanese carmaker Honda said today the Sars outbreak has had a minimal impact so far o­n its Southeast Asian sales and expects to meet its 2003 sales target of 120,000 cars.

"We are cautiously optimistic o­n our outlook for Southeast Asia," Honda's chief operating officer for Asia and Oceania, Satoshi Toshida, told reporters.

Asked if the Severe Acute Respiratory Syndrome (Sars), which has led to deaths in five countries of the Association of Southeast Asian Nations (Asean), was affecting sales, he said: "We have not seen any impact yet."

He said sales in the first quarter were o­n track but gave no details.

Honda reviews its sales figures every month and will amend its target if the actual numbers differ substantially from the forecast, Toshida said.

The company has no plans to review any of its capital expenditure or expansion plans because of the Sars crisis, he added.

The number two Japanese car-maker has expanded its presence in the region to boost efficiency and tap benefits of the Asean Free Trade Area (Afta), under which import tariffs were cut to below five percent this year. o­nly Malaysia has delayed opening its auto market until 2005.

Honda already has plants in Thailand and the Philippines, and this year opened new factories in Malaysia and Indonesia.

Local content

Honda Malaysia earlier announced it would raise its paid-up capital by RM100 million to RM270 million by March or April next year, and eventually to RM500 million to finance capacity expansion and manufacturing.

It plans to double production in its plant in Melaka to two shifts by middle of the year to boost capacity to 20,000 units, said Honda Malaysia managing director and chief executive Seiji Kuraishi.

The 170 million-ringgit factory, launched by Prime Minister Mahathir Mohamad in January, currently runs at about 55 percent capacity, he said after launching the new Honda City model.

Kuraishi said the company would increase the local content in Honda cars from 45 percent currently in the next two years.

Honda Malaysia maintains its sales target of 12,000 units this year and is confident of selling 5,000 units of the new Honda City this year as it has already received pre-launch bookings for 500 cars, he said.

Honda Malaysia sold a total of 6,089 cars last year and the company aims to strengthen its position in the higher-end market, with sales being driven by new models and an improved network of dealers.

Honda has pledged to invest a total RM374 million in its Malaysian manufacturing operations by 2005. - AFP