Guangzhou Honda Automobile Co. Ltd. has begun production at a new Chinese plant that will have capacity to build 120,000 vehicles annually.

The RMB2.2 billion ($277 million) ZengCheng facility is Guangzhou Honda’s second factory and will produce the Honda Accord sedan for the domestic market. The Accord also is manufactured at the auto maker's nearby HuangPu facility. Together, the two plants have a total production capacity of 360,000 units annually.

"Our priority is to speed delivery to customers," Guangzhou Honda President Sho Minekawa tells the media.

The auto maker says ZengCheng exemplifies Honda Motor Co. Ltd.'s "green factory" concept and is the world's first automotive plant with a complete water recycling system, where no water is released outside the plant. The system is expected to save 187,000 tons (170,000 t) of water a year.

Additionally, the use of water-based paints for both the undercoat and intermediate coat have helped reduce volatile organic compound emissions to 20 g/sq.m – the lowest level at any plant in the world, the auto maker says.

Guangzhou Honda plans to increase the number of its exclusive dealer locations to 290 by the end of the year.

Capacity shortages restricted the auto maker's first-half domestic sales to 143,519 units – less than half its sales target of 350,000 vehicles for the year.

The auto maker is 40% owned by Honda, 10% by Honda Motor (China) Investment Co. Ltd. and 50% by China's Guangzhou Auto Group Corp.