(Recasts, adds quotes, details from news conference)
By Chang-Ran Kim
TOKYO, Dec 18 (Reuters) - Japan's Honda Motor Co followed rival Toyota with a bullish forecast on Wednesday for its global auto sales next year, announcing plans to more than quadruple output capacity in China to keep up with rising demand.
Honda, Japan's second-largest automaker, said it expects its global automobile sales in 2003 to jump 10 percent from this year to about 3.1 million units, a record high.
The announcement comes a day after Toyota Motor Corp forecast a rise in total vehicle sales by five percent to a record 6.5 million units in 2003, bucking an underlying lacklustre trend in the global car market.
Honda's solid outlook is especially telling since it expects a weak global economy to push overall car demand down next year.
"With the exception of Asia, I expect (global car demand) to be softer next year," Honda President Hiroyuki Yoshino told a news conference.
Yoshino said he expected the U.S. car market to inch down to the low 16-million-units level, and the European market to also fall slightly from this year.
But Honda is aiming to boost sales in the United States by 10 percent from this year to about 1.35 million units in 2003.
Unlike local rivals such as General Motors Corp and Ford Motor Co , Honda has made little use of sales incentives for its cars, which are backed by a competitive product lineup.
OUTPUT EXPANSION IN ASIA
To keep up with an expected jump in overall demand, Honda plans to boost its global production by 10.8 percent next year to 3.19 million.
Much of the expansion will take place in Asia, where demand for cars has been growing at break-neck speed.
Honda said it would raise annual output capacity at its Chinese joint venture, Guangzhou Honda Automobile Co, near Hong Kong, to 240,000 units by spring 2004 from 50,000 now.
The venture, which will launch the new "Accord" sedan in China next month, is in the process of raising capacity to 120,000 units a year by February.
Guangzhou Honda, owned equally by Honda and Guangzhou Auto Group Corp, will invest an additional 660 million yuan ($80 million) for the expansion, which will also create 1,000 jobs to bring total headcount to 3,400 by 2004.
Honda will also begin building the "CR-V" sport utility vehicle in Taiwan next month, with output volume of 20,000 units planned in the first year.
Production will also begin at new factories in Malaysia and Indonesia early next year, while capacity will be boosted at its plant in Thailand to 120,000 from 70,000 by mid-2003.
Elsewhere, Honda will also begin production and sales of the hot-selling "Fit" subcompact in Brazil next spring.
Honda's shares took a beating in late October after the automaker cut its profit forecast for the year to March, prompting several brokerages to lower their ratings on the stock.
But industry analysts say the view that Honda's profit forecasts are conservative compared with competitors is spreading, and the shares have recovered about eight percent since hitting a year-to-date low on November 11.
Honda's shares ended down 2.3 percent at 4,300 on Wednesday, in line with other auto stocks and the broader market.