Honda's China Sales Drop 22.4% in Q1 Amid Slow EV Transition

On April 8, 2026, Honda China announced that its terminal vehicle sales in the Chinese market totaled 36,201 units in March 2026, with cumulative sales for January–March 2026 reaching 122,470 units—a 22.4% decline compared to 157,886 units during the same period in 2025. As of this quarter, Honda’s cumulative terminal sales in China have reached 20 million units. Honda’s sales in China are primarily conducted through two joint ventures: GAC Honda and Dongfeng Honda. In Q1 2026, Dongfeng Honda reported year-over-year sales growth but did not disclose specific figures, while GAC Honda’s sales dropped by 56.8% year-over-year. Currently, Honda offers four all-electric vehicle (EV) models in China, including two launched in 2025 under its new “Ye” brand: the GAC Honda P7 and Dongfeng Honda S7. In February 2026, combined sales of Honda’s EVs in China totaled fewer than 300 units; over the past 12 months, total EV sales have remained below 20,000 units. The P7 and S7 share identical core specifications and pricing and are effectively the same model sold through separate dealership networks, with current monthly sales of approximately 200 units and fewer than 100 units, respectively. Internal combustion engine (ICE) vehicles remain Honda’s primary sales driver in China, though the overall ICE market continues to shrink. In 2025, the retail penetration rate of new energy vehicles (NEVs) in China exceeded 54%. Aside from the Dongfeng Honda CR-V, which saw a 4.7% year-over-year sales increase in Q1 2026 and averaged over 10,000 units per month, sales of other key ICE models have generally declined. For example, monthly sales of the GAC Honda Accord have fallen from around 20,000 units to approximately 10,000 units, while models such as the Inspire, Civic, and Integra have each averaged fewer than 5,000 units per month over the past 12 months. In contrast, Toyota has sold more than 100,000 EVs in China over the past 12 months, and Nissan nearly 60,000 units—both having already partnered with domestic tech firms to launch localized new EV models. Since unveiling the P7 in April 2025, Honda has not introduced any new electric vehicles. As of publication, neither Honda China nor GAC Honda responded to inquiries regarding their NEV strategy, while Dongfeng Honda indicated that new models may not arrive until 2027. Due to declining sales in China, Honda’s overall profitability dropped sharply in 2025, potentially resulting in its first annual net loss since going public—an outcome that could hinder the advancement of its electrification strategy.