Tokyo, 26 July, /AJMEDIA/
Honda Motor Co will reduce its annual car output capacity in China by 50,000 units amid struggling sales, an official said Thursday, its first such cut in the Asian nation that has served as the automaker’s largest production base.
Honda has been capable of producing 1.49 million units per year in China. While planning to increase production of electric vehicles by 240,000 cars, the automaker will shed 290,000 units, mainly gasoline-powered cars, pushing down its overall output capacity of four-wheel vehicles.
The Japanese carmaker will halt production at one plant each of GAC Honda Automobile Co and Dongfeng Honda Automobile Co, its joint ventures with local automakers, around October and November, respectively.
The latest development underscores the plight of Japanese automakers in China where their sales are plummeting due to an intensifying price competition and the rise of locally made EVs.
Nissan Motor Co decided to close its passenger car factory in Jiangsu Province, sources familiar with the matter said in June, while Mitsubishi Motors Corp discontinued vehicle production in the country last year.
The downtrend has repercussions beyond the auto industry. Nippon Steel Corp said earlier this week it will dissolve its joint venture with Chinese steelmaker Baoshan Iron & Steel Co to cut steel production in China amid slumping sales of Japanese cars there.
China has been the biggest production hub for Honda, which has an output capacity of about 5 million units globally. The planned cut is part of its broader efforts to readjust its production capability in the Asian powerhouse, which also included offering early retirement packages in May to cut part of its workforce.
The Japanese automaker is trying to turn the tide by focusing more resources on EVs while shrinking gasoline-powered car operations.
