- Honda’s China sales fell from 1.62 million in 2020 to 640,000 last year.
- The GAC joint venture has built over 11 million cars since 1999.
- No new GAC Honda models are planned for China this year.
Like so many other legacy Western automakers, Honda has watched its China sales collapse in recent years. The Japanese firm isn’t ready to give up and walk away, though. Instead, it has announced a 10-year extension of its joint venture partnership with Guangzhou Automobile Group (GAC), a deal that was set to expire in 2028.
Read: Honda’s 1.2 Million-Car China Peak Is Now A 720,000-Car Retreat
Honda and GAC have been building vehicles together in China since 1999 and have sold more than 11 million units to date. The extension keeps the joint venture running through 2038, well past the point at which China’s shift to EVs is expected to be all but complete.
Nobody would have blamed Honda for packing its bags and leaving. As recently as 2020, it sold 1.62 million vehicles in China through its joint venture partnerships with GAC and Dongfeng. Last year, total Honda sales in the country cratered to just 640,000 units, 340,000 of them from the GAC joint venture and the remainder from Dongfeng. That is the scale of the hole Honda is now trying to climb out of.
New Models Are Needed
In a statement issued to Nikkei Asia, a Honda spokesperson said, “While a certain length of time is needed for business continuity, China’s automotive market is shifting rapidly, and we’ve made this decision in order to assess the business environment.”
Of course, simply remaining committed to the joint venture does not guarantee Honda’s success in the country. Although the overall market is enduring a period of constriction, Chinese buyers are continually flocking to local brands, many of which are now building world-class cars at more accessible price points.
Also: Honda Knocks Nearly $15,000 Off The Accord That Used To Sell Itself In China
If Honda wants to find success, it will need competitively priced vehicles with good technology. In 2024, it launched its Ye series of EVs in China, including the P7 built through the GAC joint venture and the S7 built with Dongfeng. While far removed from any Honda vehicles sold in the West, neither of them is particularly desirable in China, which is the problem the next round of models will have to solve.
