TOKYO (Reuters) - Honda Motor will build a new factory in Wuhan, China, that would begin producing compact cars in spring 2019, boosting its output capacity in the country by about a fifth, the Nikkei business daily said on Tuesday.
Japan's third-largest automaker by sales will spend "hundreds of millions of dollars" on the plant, which will start with capacity of 120,000 cars a year and gradually double in line with demand, the paper said.
The factory will be operated in a joint venture with local partner Dongfeng Motor Group, the Nikkei said.
Media representatives at Honda were not immediately available to comment.
China introduced a tax break a year ago that effectively shaves $1,000 off the price of passenger cars with engines of up to 1.6 liters, the Nikkei said.
(Reporting by Chang-Ran Kim; Editing by Stephen Coates)