International Electronics Business News on the 15th Japanese automaker Honda Motor Co. is reducing its full-time production workforce in China due to declining car sales in the world's largest auto market, with about 1,700 people affected by layoffs...

01 Japanese automaker

Japanese automaker Honda Motor Co said on Wednesday it is shrinking its full-time production workforce in China and may reduce factory operations in June due to falling vehicle sales in the world's largest auto market, Reuters reported. Number of days.

A Honda spokesman said that there are about 1,700 workers in Honda joint ventures who have agreed to voluntary retirement, accounting for 14% of the production employees. The spokesperson also noted that the company is considering how many employees will accept voluntary retirement, stressing that the final number of layoffs may differ from the number currently requested.

Official website information shows that Guangzhou Automobile Honda Automobile Co., Ltd. was established on July 1, 1998. It is a 50:40:10 joint venture between Guangzhou Automobile Group Co., Ltd., Honda Giken Industrial Co., Ltd. and Honda Giken Industrial (China) Investment Co., Ltd. For enterprises that jointly invest in construction and operation, the joint venture period is 30 years.

02 Honda layoffs

According to reports, Honda's layoffs in China (Guangqi Honda) mark the latest setback for traditional Japanese car brands in China.

It is well known in the industry that as local car companies such as BYD become increasingly dominant in China, and Chinese consumers are switching from internal combustion engine vehicles to electric vehicles and plug-in hybrid vehicles, the original market of established automakers including Honda Share is being lost rapidly. According to data released by the China Association of Automobile Manufacturers, from January 2024 to April 2024, the market share of Japanese automobile brands dropped from 23.1% in 2020 to 12.2%. At the same time, the share of Chinese brands increased from 38.4% to 60.7%.

In order to keep up with the pace of vehicle electrification, Honda Motor has attempted to reduce costs and increase efficiency through various methods in recent years, including layoffs. Honda China Headquarters Masanobu Igarashi predicted at the beginning of the year: "We will implement large-scale personnel optimization in China." Amid reduced sales and overcapacity, Honda will cut spending and step up preparations for its transition to pure electric vehicles (EVs).

Earlier this month, Honda told employees it was seeking voluntary layoffs.

According to data from the China Passenger Car Association, passenger car sales in China, the world's largest auto market, fell 5.8% year-on-year in April due to intensified price competition and consumers being cautious about big-ticket purchases during an unstable economic recovery.

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