Honda aims to resume production in China even as it seeks to reach an agreement with workers over ending a strike that has halted its production in China. The Company will start building 50 Jazz compacts at its export-only factory in Guangzhou from May 31.

But production at Honda’s other plants will remain suspended for an indefinite period as labor negotiations continue. Honda had earlier shut down all its four plants in China after workers went on strike over pay increase. Growing number of strikes are being reported across China by trade unions and employers.

Auto experts feel that most of the automakers will face increasing cost pressures in China as raw material costs and labor expenses are increasing in the country. But they felt that a temporary suspension in production at Honda plants will not make a major difference.

Honda had earlier closed two plants in Guangzhou on May 24 and factories in Guangzhou and Wuhan, Hubei province, on May 26. Workers building transmissions and engine parts at Honda Auto Parts Manufacturing Co. in Foshan, Guangdong province went on a strike on May 17. They are demanding higher wages and it caused Honda to halt output at four assembly plants.

China’s car sales are expected to rise 17% and reach 16 million as demand for cars increases across the country.