Honda Launches ¥1.5 Trillion Cost-Cutting Plan Over Four Years, Aims to Boost Parts Sourcing from Chinese Suppliers

Honda plans to cut costs by 1.5 trillion yen over the next four years (through fiscal 2030), targeting a 30% reduction in expenses across three key areas: stamped and forged components, electronic parts, and components related to software-defined vehicles. The company recently held meetings with major suppliers in Utsunomiya, Japan, to outline its cost-reduction strategy and assign specific targets to each supplier. Honda is asking Tier-1 suppliers to reevaluate their raw material procurement methods, increase their use of standardized parts sourced from Tier-2 and Tier-3 suppliers, and expand procurement from Chinese suppliers wherever feasible, maximizing the use of China-made components when possible. Additionally, Honda and Nissan announced on September 1 that they will jointly develop a standardized electronic control unit (ECU) for software-defined vehicles, with plans to launch vehicle electronic architectures based on this ECU starting in fiscal year 2029.