Honda Motor will slash petrol car production in China by shutting down one of its joint-venture plants this year and possibly another next year, said two insiders, highlighting the Japanese giant's troubles in the world's biggest auto market.

Japan's second-biggest automaker will halt operations at one of two petrol car plants jointly run with Guangzhou Automobile Group (GAC) in June, the people said.

Honda is also considering suspending another plant owned with Dongfeng Motor Group next year, they added on condition of anonymity because the information was not public.

The move would mark a further retreat by Honda in one of its key markets, as traditional ⁠automakers lose ground to fast-moving Chinese electric-vehicle makers and are forced to shrink legacy petrol operations.

Honda said ⁠the information was not announced ⁠by the company and there was nothing else it could add.

GAC and Dongfeng did not immediately respond to requests for comment. Japanese magazine Toyo Keizai reported last Friday that Honda planned to shut ⁠down both plants.

Honda has six vehicle plants through the two joint ventures in China.

Both have two internal combustion engine plants with output capacity of 240,000 cars a year each as well as a smaller EV facility.

Closing one internal combustion engine plant at each joint venture would halve Honda's production capacity in China to about 480,000 petrol-powered cars a year from 960,000 and cut its total annual capacity to roughly 720,000 vehicles from 1.2 million.

The pullback follows Honda's announcement last month that it was writing down the value of its China business as part of a broader overhaul of its EV strategy that includes up to US$15.7 billion in restructuring costs.

The charges are expected to lead the automaker to its first annual loss in nearly 70 years as a listed company.

Honda has struggled in China to compete with electric, software-driven cars made by rivals such as BYD.

Its sales in the country fell about 24 percent in 2025 from a year earlier to just under 647,000 vehicles.

That left its sales at nearly half of the more than 1.2 million cars it sold in China in 2023.

Honda had already lowered its annual production capacity in China from 1.49 million to 1.2 million over the past years.

One of the two people said Honda's EV plants in Guangzhou and Wuhan would begin producing EVs and plug-in hybrids developed under the leadership of its Chinese joint-venture partners from 2028 or later.

GAC and Dongfeng are among Chinese automakers ramping up exports of China-made vehicles to markets such as Europe, Southeast Asia, the Middle East and Africa, with both companies setting aggressive overseas sales targets for this year. (Reuters)



Edited by Tony Sabine