Honda accelerates its Chinese transformation

Honda has joined what is quite a noticeable trend of late, cutting capacity in China. It is suspending output at three plants, although press reports have only provided details on cutbacks at two factories. In parallel, Toyota is cutting back at its joint venture (JV) with FAW in Tianjin, while VW-SAIC is closing a JV plant in Nanjing and Nissan is closing a plant in Jiangsu province. These moves come after Mitsubishi confirmed in October last year that it was pulling out of China entirely.

Japanese OEMs have seen their share of the Chinese market decline steadily in recent years, as have long-term major players Volkswagen and GM. Whereas Chinese consumers once bought non-Chinese brands as a matter of preference, especially premium marques, the transition to electric vehicles (EVs) has been accompanied by a major change in Chinese consumers’ collective behaviour.