Losing to the electric vehicle price war! Japanese car company Honda will lay off 1,700 employees in China

As sales in the Chinese market continue to be sluggish, Japanese automaker Honda said on Wednesday (15th) that it has begun recruiting local full-time employees in China to voluntarily leave, and about 1,700 employees have agreed to leave. Competition in China\’s auto market is fierce, and Japanese automakers such as Honda are struggling in sales.

As sales in the Chinese market continue to be sluggish, Japanese automaker Honda said on Wednesday (15th) that it has begun recruiting local full-time employees in China to voluntarily resign. About 1,700 employees have agreed to resign.
China\’s auto market is highly competitive, and Japanese automakers such as Honda are struggling with sales.
\”Nikkei\” reported that \”Guangqi Honda\”, a joint venture between Honda Motor and China\’s major state-owned enterprise Guangzhou Automobile Group, has started applying for voluntary resignation from full-time employees of Chinese factories starting this month. It is estimated that about 1,700 employees have already Make an application.
Guangqi Honda has also laid off about 900 dispatched employees since November last year. Honda responded to the matter by saying that the company is adjusting its business scale according to the situation.
Guangqi Honda has four factories in China.
In China, electric vehicles are rapidly gaining popularity due to government support measures. Japanese automakers, whose strength is fuel vehicles, have apparently seen a decline in sales. Honda is expected to make production adjustments at many factories.
According to data released by the China Association of Automobile Manufacturers, Japanese automakers\’ market share in China dropped further from 23.1% in 2020 to 12.2% in the first four months of this year.
Last year, Honda\’s sales in China fell 10% to 1.234181 units. Sales of its two major joint ventures, Guangqi Honda and Dongfeng Honda, a joint venture with Dongfeng Motor (600006-CN), were roughly evenly divided, with sales of 620,469 units and 613,712 units respectively. It is close to 1.2 million vehicles.
Honda\’s two joint ventures in China have a combined production capacity of nearly 1.5 million vehicles at seven plants.
GAC Honda and Dongfeng Honda also plan to complete the construction of two independent electric vehicle factories this year, each with a capacity of 120,000 vehicles, which will bring Honda\’s annual production capacity in China to 1.73 million vehicles.

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