Honda to cut China plants

Honda is preparing to close at least one gasoline-car factory in China this year and may idle another in 2027 as it cuts back in its biggest overseas market. (reuters.com) The first shutdown is expected in June at a plant run with Guangzhou Automobile Group, and a second plant with Dongfeng Motor Group is under consideration for next year, according to Reuters and Toyo Keizai. Honda has six vehicle plants in China across those two joint ventures. (reuters.com) If Honda closes one internal-combustion plant at each joint venture, its gasoline-car capacity in China would fall to about 480,000 vehicles a year from 960,000. Total annual capacity would drop to roughly 720,000 vehicles from 1.2 million. (reuters.com) The cuts come as Honda loses ground in a Chinese market that has shifted quickly toward battery-electric and plug-in hybrid models. In the first nine months of 2025, new-energy vehicles accounted for 46.1% of all vehicle sales in China, according to China Association of Automobile Manufacturers data carried by Xinhua. (gov.cn) Honda has struggled against Chinese brands including BYD, whose cars increasingly compete on software, driver-assistance features, and price as well as electrification. Reuters reported on April 17 that Honda’s plant cuts highlight its difficulty competing with those electric, software-driven rivals. (reuters.com) The pressure has been building for more than a year. Honda’s sales in China fell 30.9% in 2024 to 852,269 vehicles, the first time in nearly a decade that the company sold fewer than 1 million cars there. (honda.com) The slide continued into 2026. Honda China said March sales fell 34.34% from a year earlier to 36,201 vehicles, while first-quarter sales dropped 22.4% to 122,470. (gasgoo.com) Honda has already started writing down the value of parts of its China business. In March, the company said a broader electric-vehicle restructuring could total as much as 2.5 trillion yen, or about $15.7 billion, and would include some Chinese operations. (reuters.com) The company is not leaving China. Reuters reported that Honda’s electric-vehicle plants in Guangzhou and Wuhan are expected to keep building electric and plug-in hybrid models, with more development work led by its Chinese joint-venture partners. (reuters.com) For Honda, the immediate change is simpler than the strategy language: fewer assembly lines for gasoline cars in China, and more of its future there tied to local partners and electric models. (reuters.com)