The Japanese auto giant is one of a number of foreign companies hit by industrial action in China as increasingly frustrated workers express their discontent at low pay and poor conditions.

The walkout halted production for part of Wednesday and Thursday at the export-focused Honda assembly plant in the southern Chinese city of Guangzhou, Dow Jones Newswires reported.

It said Honda had agreed to raise workers pay, quoting company spokesman Takayuki Fujii as saying that the issue that caused the strike was "completely resolved".

Fujii said the plan was operating as usual on Friday.

China's state news agency Xinhua, citing a Beijing-based company spokesman Zhu Linjie, also said the company management had reached agreement with the workers on salary rises.

The plant, which is 65 percent owned by Honda with the remainder held by its Chinese partners, produces compact model Jazzcars for exports to European markets and has an annual capacity of 50,000 vehicles.

Both Honda and its rival Toyota have been hit by labour unrest at plants in China, where operations have been halted several times in recent weeks.

Dow Jones said the walkout at the Honda plant was however the first known strike at a final-vehicle assembly plant in China.

Analysts say worker unrest at foreign-owned factories and the prospect of higher wage costs in China are forcing some manufacturers to consider countries such as Bangladesh, India, Indonesia and Vietnam, where wages remain relatively low.

earlier related report
China auto sales up nearly 50 percent in first half: report
Beijing (AFP) July 9, 2010 - China's auto sales soared nearly 50 percent on year in the first half, although monthly figures showed a continued trend of softer demand in the world's biggest market, a report said Friday.

Total vehicle sales hit 9.02 million units during the six month period, up 48 percent from a year ago, Dow Jones Newswires reported, citing industry group China Association of Automobile Manufacturers.

Passenger car sales also surged 48 percent on year to 6.72 million units, the report said.

In June alone, total vehicle sales rose 23.5 percent from a year earlier to 1.41 million units, but sales grew at a slower pace than in May.

Month-on-month sale have softened for three months in a row after hitting a record high of 1.74 million units in March after authorities reduced subsidies for purchases of small cars.

A total of 1.04 million passenger vehicles were sold in June, up 19.4 percent from a year ago but slightly weaker than the previous month, it added.

China's auto sales hit 13.64 million units in 2009, overtaking the United States to make the country the world's top auto market as Beijing offered incentives such as lower taxes to boost the sector during the financial crisis.

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