Honda Motor to Shut Petrol Car Plant in China

Honda Motor is planning to shut down at least one of its petrol car factories in China this year, with a second closure potentially to follow in 2026, as Japan's second-largest automaker retreats further from a market where it has lost significant ground to domestic electric vehicle manufacturers, news agency Reuters has reported.

Two people familiar with the matter were quoted in the report as saying that Honda intends to halt operations at one of two combustion engine plants it runs jointly with Guangzhou Automobile Group in June. The company is also weighing the suspension of a further plant operated through its separate joint venture with Dongfeng Motor Group next year, the sources said, speaking on condition of anonymity as the plans have not been made public.

Honda said the information had not been announced by the company and declined to comment further. GAC and Dongfeng did not respond to requests for comment. Japanese publication Toyo Keizai had earlier reported that Honda was planning to close both plants.

Honda currently operates six vehicle plants in China through its two joint ventures. Each partnership runs two internal combustion engine facilities with an annual output capacity of 240,000 cars apiece, alongside a smaller electric vehicle plant. Closing one petrol plant at each joint venture would reduce Honda's combustion engine capacity in China from 960,000 to 480,000 units a year, bringing its total annual vehicle capacity down from approximately 1.2 million to around 720,000.

The move is part of a broader retrenchment. Last month, Honda announced it was writing down the value of its China operations as part of a sweeping overhaul of its electric vehicle strategy, a restructuring that is expected to cost up to $15.7 billion. The charges are forecast to push the automaker to its first annual loss in nearly 70 years as a listed company.

Honda has found it increasingly difficult to compete in China against software-driven electric vehicles from rivals such as BYD. Its sales in the country fell around 24 per cent in 2025 to just under 647,000 vehicles which is roughly half the 1.2 million it sold there in 2023.