Nikkei Chinese Edition recently reported that Japanese automaker Honda plans to cut in half its production capacity at its engine factory in Guangzhou, Guangdong Province, China. This will represent a reduction in engine manufacturing equivalent to 30 percent of the volume of all engine-equipped Honda cars that are sold in the Chinese market.
The report stated that Japanese automakers are facing difficulties in the Chinese market. Honda’s production cut will become the largest among Japanese automakers in China. The production capacity of the “Dongfeng Honda Engine” joint venture between Honda and China Dongfeng Motor Group will be reduced from 520,000 units per year to half of that figure. A production line will be suspended by the end of March.
Honda’s sales in China have declined steeply in recent years. Sales volume in 2024 amounted to 850,000 units, a 33 percent decrease from 2023. In response to these challenges, Honda China is “advancing its transformation to solely producing electric vehicles.” In 2024, Honda’s first electric vehicle factory in Wuhan City will start production. Dedicated EV factories have also been opened in Guangzhou, ensuring a production capacity of 240,000 EVs per year.
Honda is also accelerating its software development in China, with a focus on driving assistance and entertainment capabilities based in artificial intelligence, aiming to improve the competitiveness of their electric vehicles.
Source: Nikkei Chinese, March 11, 2025
https://cn.nikkei.com/industry/icar/58240-2025-03-11-09-22-52.html