In the first half of 2024, Toyota, Nissan, and Honda all reported year-on-year declines in new vehicle sales in the Chinese market. Toyota’s sales in China totaled 694,700 units, down 17.1% year-over-year; Nissan sold 237,000 units, a 15.0% decline; and Honda’s sales dropped by 34.7% to 205,800 units. Of Honda’s total, GAC Honda sold 89,400 units, down 46% year-over-year, while Dongfeng Honda sold 116,400 units, a 22% decrease. In June alone, Honda China’s retail sales stood at 32,474 units, plunging 44.5% year-over-year—marking the 29th consecutive month of year-on-year decline. In April and May this year, Honda China’s sales fell by 48.3% and 48.7% year-over-year, respectively, representing three straight months with declines exceeding 40%. Amid rising fuel prices driven by tensions in the Middle East, demand for gasoline-powered vehicles has weakened further, exacerbating the downturn in Japanese automakers’ sales. Although recent oil price increases have moderated, Japanese carmakers anticipate that demand for gasoline vehicles will not recover in the near term. Against the backdrop of China’s steadily rising penetration rate of new energy vehicles (NEVs), Japanese brands are under mounting pressure as their slow transition toward electrification and delayed launches of new models erode their market share. To counter declining sales, Honda has begun cutting its internal combustion engine vehicle production capacity in China. GAC Honda’s Huangpu plant in Guangzhou officially ceased operations in June 2024, and Dongfeng Honda’s Wuhan plant is scheduled to shut down by 2027.