Honda Motor said it’s reducing its full-time production workforce in China, with around 1,700 employees agreeing to voluntary layoffs.
This decision comes as Honda faces declining car sales in the world’s largest auto market.
A Honda spokesperson said GAC Honda Automobile, a joint venture between Honda and Chinese state-owned automaker Guangzhou Automobile Group, informed its workers earlier this month about the voluntary layoff program.
This move highlights the ongoing challenges for Japanese car manufacturers in China.
Local brands like BYD are gaining market share, and an aggressive price war is squeezing foreign competitors.
Chinese consumers increasingly favor electric vehicles and plug-in hybrids, areas where Japanese brands have struggled to keep pace with domestic rivals.
The 1,700 workers who have opted for voluntary retirement represent 14 percent of the production staff at the Honda venture.
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The company is still determining the final number of workers accepted for voluntary retirement, and the final figure may differ from the initial count.
Honda operates four factories in China through its joint venture with Guangzhou Automobile Group, established in the late 1990s, and three additional factories through another joint venture with Dongfeng, initiated in 2004.
According to the China Passenger Car Association, passenger vehicle sales in China dropped 5.8 percent in April compared to the previous year.
The decline is due to intensified price competition and consumer hesitation to make significant purchases amid an uncertain economic recovery.
