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Honda plans to lay off staff in China on a large scale!

2024-07-14 Update From: AutoBeta NAV: AutoBeta > News >


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According to the Nikkei Chinese website, Honda will implement a personnel optimization strategy in China to cope with market changes and competitive pressure of price cuts.

"in the face of reduced sales and overcapacity, Honda will reduce fixed fees and step up preparations for the transition to pure electric vehicles," Honda China Minister Igarashi Fumihiko Accord said in an interview. " He said that 2024 will continue to transform to new energy vehicles and deal with price reduction competition, adding that "affected by price cuts, including hybrid fuel vehicles are very difficult to make a profit", "all-EV will use the previous earnings and fuel vehicle profits to survive."

In 2024, Honda plans to open new electric car plants in Guangzhou and Wuhan. Faced with the problem of overall overcapacity, Honda will consider how to make effective use of these new plants while optimizing its staff, Mr Igarashi Fumihiko said. He also revealed that Honda plans to launch more than two electric models a year to speed up the electrification process.

In December 2023, Honda said it would fire about 900 workers from Guangzhou Auto Honda, a Chinese joint venture, because of a sharp decline in fuel vehicle sales as a result of its rapid shift to the electric car market. A Honda spokesman said the layoffs were about 7 per cent of GAC's Honda employees. According to the regulations, GAC Honda will compensate the contract workers who leave early. Honda said production was declining, so the dispatch contract was terminated. However, since then, GAC Honda refuted the layoffs in parallel, saying that it was only to terminate the agreement of the labor dispatch company, and to provide financial compensation to the labor dispatch personnel in accordance with the rules and regulations in a timely manner, which would have no impact on the GAC Honda production line, as well as new energy and intelligent strategies.

It has to be said that Honda's development pressure in China is indeed great, fuel vehicles are becoming more and more difficult to sell, and electric cars are not hot, which will certainly affect Honda's position in the Chinese market in the long run.

Honda sold 1.2342 million vehicles in China in 2023, down 10.1 per cent from a year earlier, according to the data. Of these, Honda sold 165800 vehicles in China in December 2023, up 19.7 per cent from a year earlier. From the perspective of enterprises, GAC Honda's cumulative sales in 2023 was 620500 vehicles, down 13.7% from the same period last year, and has declined for three consecutive years. Dongfeng Honda's cumulative sales in 2023 were 613700, down 6% from a year earlier, and for the third year in a row.

In terms of vehicle segments, the Honda brand sold more than 100000 models in 2023, with the highest sales of CR-V, 194400, followed by Accord, 174400, 46300 less than in 2022, 167700 Civic, 119200 sister models and 122,200 Haoying.

On the other hand, Honda China has announced that it will fully enter the era of electrification. After 2027, all Honda models launched in China will be hybrid and pure electric vehicles, and will no longer be launched with new pure fuel models. By 2035, Honda China will account for 100% of pure electric vehicle sales. Earlier, Honda China announced that it would sell only pure electric and hybrid models in the Chinese market from 2030, instead of new fuel vehicles. Honda China had to advance its electrification process against the backdrop of the rapid growth of new energy vehicles. At present, both Guangzhou Auto Honda and Dongfeng Honda have announced that they will no longer put in new fuel cars after 2027.

However, in the field of electrification, Honda really has no products to come up with. At present, Honda's pure electric models in China include e:NP 1 and e:NS 1, of which e:NS sells 10600 vehicles a year and less than 1,000 vehicles per month, while e:NP 1 sells only 4502 vehicles. In addition, a number of Honda models have also added plug-in hybrid versions, such as Accord, CR-V, but also do not have a very good market performance.

Honda in the era of fuel cars, "one Japan, lifelong Honda" has become the loyal slogan of Honda fans, which is the resonance of users brought by the strong product power, but the consumer groups who have experienced the baptism of new energy development and changes, the market is becoming more rational, when the product advantage is no longer, consumers will always choose other brands.

The cold wave is still clinging to the flavor of spring, and the new war is continuing. From the current perspective, independent brands have taken the lead in some positions, and Honda, as an international well-known automobile brand, how to hold on to the Chinese market also needs Honda internal thinking.

Honda CEO Toshihiro Mibu said at the 2023 Shanghai Motor Show that other car brands are far ahead of Honda in electrification, which is much higher than Honda expected. Honda will lose the game if Honda does not adopt a counterattack strategy.

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