Due to the decline in sales, Honda has laid off 1,700 employees in China!

Xinzhixun

2024-05-15 12:09Posted on the official account of Guangdong Xinzhixun

On May 15, according to Nikkei Asia, due to the decline in sales, Honda is reducing its full-time production staff in China, and about 1,700 workers have agreed to leave, accounting for about 14% of its total production employees. In addition, Honda may also reduce the number of days of operation at its factories in June.

According to the report, Guangqi Honda, a joint venture between Honda and China's Guangzhou Automobile Group, has already had some employees leave this month.

Honda wants to make a comeback by adding EV models while improving profits by cutting costs. As part of a revamp to its EV lineup, the company will release models with displays made by Chinese companies in 2025.

Honda's choice to lay off workers at its joint venture in China is an example of how Japanese automakers are coping with fierce price competition in China, especially in a Chinese auto market where EV penetration has begun to break 50 percent.

According to the data, in April this year, Honda's new car sales in China fell by 22.2% year-on-year, Toyota's sales in China also fell by 27.3% year-on-year, and Nissan's efficiency in China fell by 10.4% year-on-year.

Honda expects sales in China to be 1.06 million vehicles in fiscal 2024, down 13% from the previous year and about 40% below the all-time high in fiscal 2020.

It is worth noting that Mitsubishi Motors decided to withdraw from the Chinese market last year. Nissan is also considering reducing its annual production capacity in China by about 30%. Toyota said at its earnings conference this month that its China business will be a test of "endurance" in the coming years.

While Japanese automakers are struggling in the Chinese market, the market share of Chinese brand automakers is soaring. According to the China Association of Automobile Manufacturers, the market share of Japanese auto brands fell to 12.2% from 23.1% in 2020 from January 2024 to April 2024. At the same time, the share of Chinese brands rose from 38.4% to 60.7%.

Among them, BYD, China's largest electric car maker, and other new energy vehicle makers cut prices for more than 10 models in February. Other Chinese automakers have followed suit, and Tesla has also decided to lower the prices of all four of its electric vehicles in China. This has further intensified competition in the entire Chinese auto market.

Editor: Xinzhixun-Lin Zi

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