- The Japanese brand is axing one of the manufacturing lines at the Dongfeng Honda Engine factory.
- In January, Honda ended production at one of its Chinese joint venture plants with the GAC Group.
- Perhaps its most important new vehicle in China is the all-electric S7 that rivals the Tesla Model Y.
Honda had a tough year in China, with sales dropping 30.9% to 852,269 units in 2024. This marks the first time in nine years that the Japanese brand has sold fewer than 1 million cars in the country. The decline is partly attributed to increased competition from local companies and a reduced demand for internal combustion engine vehicles. In response, Honda plans to halve production at an engine plant in Guangdong province and shift its focus more aggressively toward EVs.
Last year, new energy vehicles in China —comprising BEVs, PHEVs, and FCEVs—accounted for roughly 40% of all new car sales, with BYD leading the charge. In 2024, BYD sold 3.83 million passenger cars in the country, all of which were either BEVs or PHEVs. This is 8.5 times the number of cars it sold locally in 2019, and its rapid growth is coming at the expense of market share from legacy brands like Honda.
Read: Honda S7 Is A $36,000 Electric SUV That’s Not For US
Due to strong demand for electrified vehicles, Honda will close a manufacturing line at the Dongfeng Honda Engine factory at the end of this month, Nikkei Asia reports. This move will halve the annual production capacity of its joint venture, reducing it from 520,000 units to around 260,000.
In January, it ended production at a joint venture plant with Guangzhou Automobile Group that had an annual capacity of 240,000 vehicles. These changes will lower Honda’s local production capacity from 1.49 million as of early 2024 to just 960,000 units. Local media understands the company is offering early retirement programs to workers at the plants impacted by the closures.
One of its most important new models launched in China is the all-electric S7. The compact SUV is a direct competitor to the Tesla Model Y, Onvo L60, and Zeekr 7X. It has been launched in two guises, both with 89.8 kWh battery packs and up to 404 miles of range. Local prices start at ¥259,900, which is a touch under $36,000. Honda is also working on two new EVs – a larger crossover known as the P7 and a sleek sedan that was previewed last year by the GT Concept.
