Honda will stop production of gasoline vehicles in two plants in China and, for the first time, will start importing an electric SUV manufactured in the Dragon Country into Japan. This is an operation that is part of a repositioning strategy for the Japanese brand in the world’s largest automotive market, with the aim of addressing the severe sales crisis affecting the group’s activities in the region. In the background is the need to realign the industrial and commercial presence with the new competitive dynamics of the sector.
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Honda stops ICE production in China
Meanwhile, the company will keep two Chinese plants active dedicated to zero-emission vehicles, but will proceed with a downsizing of the annual production capacity of thermal models, currently at 960,000 units. The decision would be made necessary by the strong price competition triggered by local EV manufacturers, first and foremost BYD, which has intensified pressure on the market and on the margins of international players. The most recent data describe a particularly difficult context for the entire segment: in 2025, production in China would have fallen by 16.4% to 680,000 cars and, in March, deliveries would have stopped at 36,000 units, a decline for the 26th consecutive month.
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Change in industrial strategy
In this context, Honda will start selling the electric Insight in Japan, an SUV built with the Dongfeng joint venture and re-adapted for the domestic market. This would be the second model imported from China after the Odyssey minivan, consistent with an industrial design that, according to the Japanese company, should contribute to improving the utilization rate of Chinese plants, hampered by falling demand. The plan is judged by analysts as a maneuver on an increasingly unstable financial ground: Honda would have anticipated the risk of closing the fiscal year ending in March 2026 with a net loss, for the first time since its stock market listing in 1957.
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