Honda's joint ventures in China have begun laying off full-time production staff as sales fall.
It is reported that GAC Honda began soliciting voluntary resignations in May, and currently about 1,700 workers have agreed to resign, accounting for about 14% of its total production employees.
Insiders told The Paper that the layoffs were mainly due to optimization and adjustments in the production area, with the aim of improving staff efficiency.
In the fourth quarter of 2023, GAC Honda had its first layoff in its 25 years of establishment, firing about 900 contract workers, accounting for 7% of GAC Honda's approximately 13,000 employees at the time.
It is generally believed that the unprecedented layoffs are due to the decline in sales. The latest sales data show that Honda's sales in China in April this year decreased by 22.2% year-on-year. Honda plans to sell 1.06 million vehicles in China this year, a decrease of 13% from last year. Due to sluggish sales, Honda is expected to reduce the number of days its factories are open in June.
Not only Honda, the performance of the three major Japanese automakers in China is declining: in April this year, Toyota's sales fell 26.5% year-on-year, Nissan's sales fell 10.4% year-on-year. Last year, due to declining sales, Mitsubishi Motors decided to withdraw from the Chinese market.
Japanese automakers are currently facing challenges in the Chinese market due to the lagging transformation to electrification. According to statistics from the China Association of Automobile Manufacturers, the market share of Japanese brands in China was 23.1% in 2020, and fell to 12.2% in January-April 2024. The share of Chinese local brands rose from 38.4% to 60.7%.
However, Japanese auto giants have said they will accelerate the electrification transformation of the Chinese market. Honda has created a new electric car brand "Ye" for Chinese users, and is about to launch three new cars, and is preparing to use Huawei's displays on electric cars to be launched in 2025.
