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Guangzhou Auto Honda will cut 900 ​ jobs?

2024-04-13 Update From: AutoBeta NAV: AutoBeta > News >


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Japanese automaker Honda said on December 2 that its joint venture in China, Guangzhou Auto Honda, cut 900 employees due to a rapid shift to the electric car market, according to media reports such as 36 Krypton.

It is reported that the layoffs accounted for 6.9 per cent of Guangzhou Auto Honda's staff of about 13000. A Honda spokesman said Guangzhou Auto Honda's production was declining, so the dispatch contract was terminated, but the company did not say which models were being cut.

GAC Honda will issue a layoff notice to employees at the end of November. According to local regulations, GAC Honda will compensate contractors who leave early. Honda said the layoffs were the first in 25 years since Honda made cars in a joint venture with Guangzhou Motor Co., Ltd., in 1998.

As of press time, GAC Honda officials have not responded to the above news, and it is not clear whether the news is true.

According to the official website, Guangzhou Automobile Honda was founded in July 1998 and was jointly invested by Guangzhou Automobile Group Co., Ltd., Honda Technology Research Industry Co., Ltd. and Honda Technology Research Industry (China) Investment Co., Ltd., with a share ratio of 50:40:10. Headquartered in Huangpu District, Guangzhou City, it has three factories and four vehicle production lines in Huangpu District and Zengcheng District, with an annual production capacity of 770000 units.

At present, Guangzhou Auto Honda models for sale include Accord, Haoying, Guandao, Odyssey, Zhijia, colorful Intelligence, style, Ling School and Feido models. While fuel vehicles are still the tone of Honda's overall market in China, GAC Honda's sales in China have fallen amid a shrinking traditional fuel vehicle market and rising domestic sales of new energy vehicles. According to data released by GAC GROUP, Guangzhou Auto Honda sold a total of 499359 vehicles from January to October, down 21.55% from a year earlier.

In fact, in addition to the above-mentioned layoffs, Honda has made a lot of moves in the field of electric vehicles in order to keep up with the transformation of electrification in the Chinese market. Honda China has made significant adjustments, including advancing the "suspension of fuel vehicles" from 2030 to 2027, that is, after 2027, all Honda models launched in China are hybrid and pure electric vehicles, no longer put in new pure fuel models, and Honda China will account for 100% of pure electric vehicle sales by 2035.

On October 26th, Guangzhou Auto Honda announced that it would no longer launch new pure fuel models from 2027, when all Honda models sold in China would be 100% electrified from 2035. Compared with other Japanese joint ventures, Honda is determined to transform the electrified sector and is more "aggressive" in its goal of electrification, but Honda has very low feelings in the domestic new energy vehicle market.

According to the official website, Guangzhou Auto Honda currently sells only one e:NP1 electric car, and the car market sales are dismal. According to the retail data of the Federation of passengers, the cumulative sales of the e:NP1 in the first three quarters of this year were 4217 vehicles, which is a far cry from the current mainstream tram sales in the car market.

On November 17th, at the 2023 Guangzhou Motor Show, Guangzhou Auto Honda e:NP2 mass production version was officially unveiled. The new car and Dongfeng Honda e:NS2 mass production version are sister cars to each other, based on Honda's exclusive intelligent and efficient pure electric structure "ERV N Architecture F". It is the second model of Honda's eRom N series and is expected to go on sale in 2024.

With the fierce competition in the car market, the differentiation and knockout stages of the car market are also accelerating. For today's joint venture car companies, in addition to accelerating the electric transformation, the declining market share of fuel vehicle sales is also a difficult problem that needs to be solved at present. According to the data, cumulative sales of Japanese brands in the first three quarters of 2023 were 2.6127 million, down 15.4% from a year earlier and accounting for 17.2% of China's market share. For comparison, Japanese brands accounted for 20.0% of China's market share in 2022.

Under the dual pressure of electrified transformation and global market competition, whether Honda or other Japanese auto companies want to gain market share in China, it is urgent to accelerate the introduction of electrified products. Of course, with the continuous expansion of the new energy vehicle market, Guangzhou Auto Honda as a latecomer, even if the launch of new electric vehicle products, the follow-up will face a lot of competitive pressure.

Honda is in a difficult phase of transition, and it may be expected if the layoffs are true. Earlier, auto companies including Chery Jaguar Land Rover, Ulay Motors and Volkswagen all announced layoffs. From the point of view of the time point, it is only about three years before Guangzhou Auto Honda banned the launch of new fuel cars, and it remains to be seen whether there will be a major reform in Honda's sales in China.

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