On 26 July, Honda China released a message to the public saying that Honda China has implemented capacity optimisation to accelerate its transition to electrification.
The news shows that Honda China currently has seven vehicle production lines with a combined annual capacity of 1.49 million units. GAC Honda plans to close its fourth production line in October 2024, which has an annual capacity of 50,000 units. Dongfeng Honda plans to shut down its second production line in November 2024, which has an annual capacity of 240,000 units. Honda’s total vehicle production capacity in China will change from 1.49 million units to 1.2 million units after the adjustment.
Meanwhile, Honda’s electrification process in China will be accelerated, with a new electric-only plant under construction at Dongfeng Honda set to go into production in September 2024, and a new new new energy plant at Guangzhou Honda set to go into production in November 2024.
This year, Honda in the field of electrification action frequently, April 16, Honda officially released for the Chinese market launched a new electric brand ‘Ye’, and displayed the ‘Ye S7’, ‘Ye P7 The ‘Ye’ brand is the first in the world to use the new ‘H’ logo, which belongs to the new generation of pure electric vehicles, and adopts the new intelligent ‘H’ logo, which is the first in the world to use the new ‘H’ logo. The ‘Ye’ brand is the first in the world to use the new ‘H’ logo for a new generation of pure electric vehicles, adopting the new intelligent and efficient pure electric ‘W’ architecture, and plans to launch six new models under the ‘Ye’ brand by 2027.
Honda is firmly transitioning to the new energy market, and China is Honda’s first position to embrace new energy models. And from the state of the Chinese market, joint venture brands to occupy a place in China, must accelerate the transition to the new energy market.
Passenger association data show that in the first half of this year, the country’s cumulative retail sales of new energy passenger cars was 4,111,000 units, an increase of 33.1 per cent year-on-year, of which, in June, retail sales of new energy passenger cars amounted to 856,000 units, a year-on-year increase of 28.6 per cent, with a penetration rate of 48.4 per cent, compared with the same period last year, 34.9 per cent of the penetration rate increased by 13.5 percentage points.
The surging new energy market has squeezed the market share of fuel vehicles to a large extent, which has had a considerable impact on joint venture brands that are known for their fuel vehicles.
According to sales data released by Honda China, Honda’s cumulative sales in China in the first half of this year were 415,906 units, a year-on-year decline of 21.5 percent, according to the first half of the performance of the estimated overall sales of Honda in China this year is about more than 800,000 units, if we calculate in accordance with the annual sales of 850,000 units of the results of the 1.2 million production capacity of Honda in China, the utilisation rate of about 70%, which requires Honda to work hard to grab more market share, otherwise the story of capacity optimisation will play out again.