Dongfeng Honda Automobile Co. will build a new plant in China to meet robust demand in the Chinese market, the company said in Wuhan Wednesday.

Dongfeng Honda, a joint venture between Japan's Honda Motor Co. and Dongfeng Motor Group Co. of China, said the plant is scheduled to start production in the second half of 2012 with an initial capacity of 60,000 units.

The project, to cost 1.15 billion yuan (168 million U.S. dollars), will ultimately have a capacity of 240,000 units, the company said.

The plant covering an area of one million square meters is about 4 km northeast of the existing plant in Wuhan, capital of the central province of Hubei.

Dongfeng Honda sold 210,600 vehicles in 2009, an increase of 28.2 percent from the 2008 sales.

The company will have an annual capacity of 300,000 units after the second plant becomes operational, as it is planning to increase the annual capacity of existing plant from 40,000 units to 240,000 units.

Honda's overall annual capacity in China will then reach 710,000 units, which also include 360,000 units at Guangqi Honda and 50,000 units at Honda Automobile (China).

China overtook the United States as the world's largest auto market last year thanks to government's stimulus measures and strong economic recovery. The China Association of Automobile Manufacturers announced on Jan. 11 that 2009 auto sales rose 46.15 percent year on year to 13.64 million units.