Honda Plans to Shut Down Two Internal Combustion Engine Vehicle Plants in Guangzhou and Wuhan

[Capacity Adjustment] Honda plans to shut down two internal combustion engine vehicle plants in Guangzhou and Wuhan, reducing its annual production capacity from 1.2 million units to 720,000 units.

Core Development: Significant Reduction in ICE Vehicle Capacity

The GAC Honda plant will cease production in June 2026, and the Dongfeng Honda plant will halt operations in 2027. This move aims to address five consecutive years of declining sales in China, with 2025 sales totaling only 645,300 vehicles, roughly half of its peak volume.

Key Data: Lagging Electrification Leads to Underutilized Capacity

As of 2025, Honda’s total production capacity in China stands at 1.2 million units, but actual output is only 680,000 units, resulting in a utilization rate below 50%. During the same period, Honda built two new dedicated battery electric vehicle (BEV) plants with a combined annual capacity of 240,000 units (120,000 each), yet its new energy vehicles still struggle to compete against domestic brands like BYD.

Strategic Rationale: Delayed Electrification Triggers Global Restructuring

Due to this strategic realignment, Honda expects to record impairment losses of up to 2.5 trillion yen, which could lead to its first annual net loss in nearly 70 years since going public.