(Bloomberg) -- Honda Motor Co. will start cutting production of gasoline cars in China by 19% from October as it moves toward electrification.
The Japanese automaker will halt one line at joint venture Dongfeng Honda with an annual production capacity of 240,000 units from November. In October, it will also entirely shut down its GAC Honda plant, which can make 50,000 units annually.
The move is aimed at “accelerating the steady shift to EVs and optimizing production capacity for sustainable growth of our four-wheel business in China,” a Honda spokesperson said via email.
Honda’s production capacity in China is around 1.5 million units and with the latest move, that will fall by 19%. An earlier report in the Nikkei said that Honda plans to cut production capacity for gas-powered vehicles in China by about a third.
Japanese automakers have been struggling in China due to their lackluster electric car offerings and intense competition from local players including BYD Co. Tesla Inc. cars are also popular in China, where they’re shipped from the US automaker’s factory in Shanghai.
Nippon Steel Corp. earlier this week said it will exit a joint venture in China as its top customers — Japanese automakers — struggle to maintain market share in Asia’s biggest economy.
Dongfeng Honda, where the automaker builds models such as Civic and Life, will be used instead to make auto parts and for research. Production of those models will be shifted to another plant in the country.
GAC Honda, which makes the Accord plug-in hybrid, will be repurposed as a warehouse and for other uses, the spokesperson said.
--With assistance from James Mayger.
(Updates with further information around Civic, Life models.)
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