Japanese automaker Honda has decided to reduce the production capacity of its engine plant in Guangzhou, Guangdong Province, China, to half.
According to Kyodo News and the Nihon Keizai Shimbun (Nikkei) on the 10th, Honda plans to cut its production lines at the Guangzhou plant from two to one, halving its engine assembly capacity from the previous annual total of 520,000 units. This corresponds to about 30% of the gasoline engine sales in China.
In January, Honda also suspended production at one of the three gasoline vehicle assembly plants operated by its joint venture with Guangzhou Automobile Group (GAC).
Honda has been struggling in China due to lagging electric vehicle development. Last year, Honda sold about 850,000 vehicles in China, down about 30% compared to the previous year, falling below 1 million for the first time in nine years.
Since last year, Honda has reorganized its production system in China to reduce gasoline vehicle production and has started operations at an electric vehicle-exclusive plant in Hubei Province.
Meanwhile, Nissan, which has been facing poor performance, has decided to maintain its five completed vehicle plants in Japan for now. The company determined that plant closures would significantly impact employment and has decided to consolidate production lines.