Honda to Halt Some China ICE Plants Amid Overcapacity

Honda plans to suspend operations at one of its internal combustion engine (ICE) vehicle plants in China in June 2024. The plant, operated by GAC Honda—a joint venture with Guangzhou Automobile Group—has an annual production capacity of 240,000 vehicles. Additionally, Honda is also considering halting operations at some facilities run by its joint venture with Dongfeng Motor Corporation. Currently, Honda operates six vehicle assembly plants in China through its joint ventures, with a combined annual production capacity of 1.2 million units—960,000 for ICE vehicles and 240,000 for electric vehicles. Due to declining sales, these plants have long been operating at low utilization rates. In 2023, Honda’s vehicle sales in China totaled 640,000 units, a 24% year-over-year decline, representing only 40% of its historical peak. Production volume is expected to drop further to 680,000 units by 2025, nearly 60% below the peak level. Honda is implementing capacity optimization measures to improve its profitability.