TOKYO, June 30 (Reuters) - Japan's Honda Motor Co will boost daily production of motorcycles at its plant in Hanoi, Vietnam, by 40 percent to 2,500 from July, the Nihon Keizai Shimbun newspaper said on Sunday.
The output increase was in response to strong sales of its Wave Alpha model since the debut of the product in January, the newspaper said quoting company sources.
Japan's second-ranked Honda has faced tough competition in the Vietnam motorcycle market since 2000 with Chinese rivals offering products that closely resemble those of Japanese manufacturers, the newspaper said.
Honda intended to fight back with the Wave Alpha, it said.
Despite its advanced engine, the motorcycle was priced at just $730, competitive with Chinese models, and Honda had a three-month order backlog for the popular motorcycle, the newspaper said.
Sales were projected to reach 200,000 this year, it said.
Output at the Hanoi plant of three Honda motorcycles was projected to reach 350,000 this year, 150,000 more than initially projected, it said.
Honda would add 100 to its 2,500-strong workforce to meet increased demand and some production lines would run at capacity, it said.
Overall motorcycle sales in Vietnam were estimated at 1.9 million this year, with Chinese products accounting for more than 60 percent, it said.
Honda's aim was to capture 20 percent of the Vietnamese market through the output increase and it planned further capital investment in the future, the newspaper said without giving details.
(US$1 = 119.55 Yen)