Honda has made the tough decision to cut 900 jobs at its joint venture in China as the country undergoes a shift towards electric vehicles (EVs), according to a report by Nikkei Asia. The move comes after an 18.5% sales drop for GAC Honda Automobile, reflecting the challenges faced by the Japanese automaker in one of its key markets.
China is swiftly moving towards the widespread adoption of EVs, with a goal of becoming an all-electric vehicle market by 2035. This shift has posed challenges for companies like Honda, which predominantly offer gasoline-powered and plug-in hybrid models in the country. The competition from Chinese EV powerhouse BYD has further intensified the struggle for market share.
Other Japanese automakers, such as Toyota and Mitsubishi Motors, have also faced similar setbacks in China, prompting production cuts and sales declines. Honda, however, is taking steps to adapt, including a significant investment of $3.4 billion in the production of electric motorcycles and mopeds over the next decade.
The global market for electric motorcycles is expected to see significant growth, with Honda aiming to introduce 30 new electric models by 2030. Despite these efforts, Honda plans to leverage existing infrastructure for internal combustion engine models before establishing dedicated electric motorcycle production plants.
Amidst these changes, BYD, China’s largest EV maker, has achieved a sales record, surpassing Nissan and highlighting the ongoing growth of the EV sector. As the automotive industry continues to evolve, companies like Honda are seeking to align with global trends and consumer preferences.
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