The world’s most famous Japanese automaker, Honda, will close its factory in China, significantly halting vehicle production at other plants. The company revealed that it has started seeking to produce more electric vehicles and get heavy competition from other Chinese brands. In October, Honda plans to close its plant operation in a joint venture with Chinese state-owned automaker Guangzhou Automobile Group.
The automaker has made the Accord Sedan model at the nearly two-decade-old plant, which has an annual production capacity of 50,000 vehicles. Additionally, Honda will pause production at another factory in China that runs separately on the site and has an annual production capacity of 2,40,000 vehicles. One of the spokespersons shared that the company is struggling due to tough conditions in China’s automobile market. As a result of the stoppage, Honda’s annual production will shrink to 1.2 million from 1.49 million production.
Honda and Nissan Motor are the top Japanese automakers in China, which are historically strong markets that are now taking a big hit with the rise of local companies. With the rising production of EV (Electric Vehicle) components using AI and automotive software platforms to beat global competition, Japanese automakers are at risk of losing customers due to the changed dynamic of the Chinese market as Southeast Asia companies are setting up for exports and factories overseas. Getting along with the vision, Honda is aiming to eliminate the gap in vehicle production and sales.
