Recently, it was revealed that since May, GAC Honda has initiated large-scale layoffs through hierarchical notifications, with the scale expected to reach thousands of people.
Further information from industry insiders disclosed that this round of layoffs involves multiple business lines and has already initiated internal resignation procedures, primarily focusing on voluntary resignations with corresponding compensation. The layoff action is expected to continue until August, with May being particularly concentrated.
In fact, this is not the first time GAC Honda has been reported to be conducting layoffs. On December 2nd last year, Honda announced that due to a rapid shift towards the electric vehicle market, resulting in a significant decrease in sales of conventional fuel vehicles and surplus personnel, the company would dismiss approximately 900 contract workers from its Chinese joint venture, GAC Honda.
Regarding the rumors of layoffs this time, GAC Honda officials have not denied them. They responded by stating that the recruitment process has just begun, and employees can voluntarily propose to leave. GAC Honda will compensate employees in accordance with laws and regulations, although the specific compensation plan has yet to be finalized. The non-renewal of expiring labor contracts and voluntary negotiation to terminate labor contracts are part of the plan to accelerate GAC Honda's transition to new energy strategies. Production will also be adjusted with the reduction of the workforce, but specific production plan adjustments have not yet been clarified.
According to Nikkei News, as of May 15th, more than 1,700 employees have agreed to resign, accounting for 14% of the total production staff of the joint venture. Additionally, Honda may also reduce the operating days of its factories in June.
According to data from the China Passenger Car Association, the penetration rate of new energy vehicles in domestic retail sales reached 43.7% in April, an increase of 11.7 percentage points from the same period last year's 32%. In April, the penetration rate of new energy vehicles in domestic brands was 66.8%, in luxury brands was 22.6%, while in mainstream joint venture brands, it was only 7.5%.
The aforementioned data also shows that in April this year, the retail sales of mainstream joint venture brands decreased by 26% year-on-year and 9% month-on-month. The market share of German brands in April was 19%, a decrease of 2.2 percentage points year-on-year, while that of Japanese brands was 15.2%, a decrease of 3.6 percentage points year-on-year. The market share of American brands reached 5.9%, a decrease of 2.6 percentage points year-on-year.
Looking specifically at various joint venture enterprises, according to data from the Automotive Research Institute, GAC Honda's cumulative sales in January-March this year were nearly 110,000 vehicles, almost flat compared to the same period last year, with a decline lower than Honda's other joint venture in China, Dongfeng Honda (-5.35%), as well as SAIC-GM (-12.82%), Beijing Hyundai (-11.3%), and GAC Toyota (-10.94%).
However, it is worth noting that prior to this, its sales in 2023 had already declined by 16.68%, leading among various joint venture automakers, resulting in its capacity utilization rate dropping to less than 85% that year.
Therefore, for joint venture automakers that still harbor ambitions in the Chinese automotive market, accelerating transformation and achieving breakthroughs have become critical measures.
In fact, it's not just GAC Honda that has been affected by Honda's decline in China. Data from the investigation company MarkLines shows that Honda's market share in China decreased by 1.1 percentage points from 2021 to 2023, dropping to 4%. From January to April, sales in China were 280,000 units, a decrease of 11% year-on-year, with the largest decline among the three Japanese automakers.
