Honda Motor Company confirmed it plans to cut its engine production capacity in China, as it grapples with rising overcapacity due to intensifying competition from local manufacturers and falling demand for internal combustion engine (ICE) vehicles in the country.
The Japanese automaker said it will close one of the two engine production lines at its Dongfeng Honda Engine Company joint venture in Guangzhou in southern China at the end of March, as it shifts its focus to producing battery electric vehicles (BEVs) for the local market and for export. Engine production capacity at the plant will be halved to 260,000 units per year, from 520,000 at present.
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A company official confirmed that the capacity cut would be equivalent to around 30% of the automaker’s gasoline-powered vehicle sales in the country. Honda reported a 31% drop in vehicle sales in China in 2024 to a ten-year-low of 852,000 units. The company carried out significant restructuring in the country last year, with operations at three plants in Guangzhou and Wuhan either shut down or suspended.
