- Honda and GAC will reportedly close one of the plants they operate together.
- The report comes as Honda continues restructuring after betting big on EVs.
- Honda’s Dongfeng joint venture may also see a plant closure due to low ICE sales.
Hot off the back of Honda’s $15.7 billion restructuring costs and a broader EV strategy overhaul announced last month, things aren’t looking good for Honda’s Chinese venture either. At least one of its automobile manufacturing plants in China will be closed by the end of June, according to a recent report.
The plant in question is part of their joint venture with Guangzhou Automobile Group (GAC), following Honda’s China sales fall by some 24% in 2025 to just under 647,000 vehicles, roughly half of the 1.2 million sold in 2023.
According to Reuters, another plant from Honda’s other JV with Dongfeng Motor may be shut soon, as the Japanese automaker tries to keep pace with a rapidly changing market. Demand for traditional petrol vehicles has dropped significantly, and local electric vehicle brands are increasingly taking market share from foreign manufacturers, putting them under increasing strain.
A Turning Point For Honda In China’s Evolving Market
Honda has six plants as part of its alliances with GAC and Dongfeng, but sustaining ICE production looks increasingly difficult. Estimates indicate that closing a single ICE plant in each joint venture would halve Honda’s petrol car production capacity in China, dropping from 960,000 to approximately 480,000 cars per year. This would also reduce Honda’s total annual vehicle capacity in the country from 1.2 million to around 720,000.
This comes on the heels of a rough year for the automaker in China, where it posted a steep drop in sales. As yet, there have been no official announcements of closures by the company or its partners, but analysts expect some slowdown.
Honda’s ICE offerings have seen some impressive offers, indicative of their poor sales performance. For instance, GAC Honda was offering returning customers a hefty discount of $14,610 (100,000 yuan) off a new Accord e: PHEV earlier in the year.
The bigger picture is to shift investment toward electric vehicles, although Honda’s EV growth in China will likely remain slow, as competitors already outpace them in tech and consumers increasingly prefer cars better optimized for local integration and cutting-edge software.
