Emerging local brands like Byd have forced Honda’s hand in the largest new and ultra-competitive cars in the world
<!–
–>
by Brad Anderson
March 11, 2025 at 19:22
–>
–>
- The Japanese brand has removed one of the manufacturing lines of the Dongfeng Honda engine plant.
- In January, Honda ended production in one of its Chinese joint venture factories with the GAC group.
- Its new most important vehicle in China is perhaps the electric S7 that competes with the Tesla Y model.
Honda has experienced a difficult year in China, sales down 30.9% to 852,269 units in 2024. This marks the first time in nine years that the Japanese brand has sold less than a million cars in the country. The drop is partly awarded to increased competition from local businesses and a reduction in the demand for internal combustion engine vehicles. In response, Honda plans to make the production in a motor factory in the province of Guangdong and to concentrate more aggressively towards electric vehicles.
Last year, new energy vehicles in China – BEV, Phevs and FCEV, compatible, represented around 40% of all sales of new cars, with byd leading. In 2024, byd sold 3.83 million tourist cars in the country, which were all either BEV or PHEV. This represents 8.5 times the number of cars it sold locally in 2019, and its rapid growth is at the expense of market shares in inherited brands like Honda.
Read: Honda S7 is an electric SUV of $ 36,000 that is not for us
Due to the high demand for electrified vehicles, Honda will close a manufacturing line at the Dongfeng Honda engine plant at the end of this month, Nikkei Asia Reports. This decision will half the annual production capacity of its joint venture will be half, reducing it from 520,000 units to around 260,000.
In January, he ended the production in a joint venture with Guangzhou Automobile Group which had an annual capacity of 240,000 vehicles. These changes will reduce the local production capacity of Honda from 1.49 million at the beginning of 2024 to only 960,000 units. Local media understand that the company offers early retirement programs to factor workers affected by closings.
One of its new most important models launched in China is the electric S7. The compact SUV is a direct competitor of the Tesla model, Onvo L60 and Zeekr 7X. It was launched in two forms, both with batteries of 89.8 kWh and up to 404 miles of range. Local prices start at ¥ 259,900, which is a touch less than $ 36,000. Honda also works on two new electric vehicles – a larger crossover known as P7 and an elegant sedan that was previewed last year by the GT concept.
