To be honest, our current situation in China is indeed very difficult. The market competition is very fierce now. Guangzhou Honda used to focus more on the field of fuel vehicles. Now, 50% of China's automobile market share is occupied by new energy vehicles. Guangzhou Honda has spent a lot of time on electrification transformation, but there are still some aspects that lag behind other brands, "said Senshan Keying, General Manager of Guangzhou Honda, in an interview recently.
Moriyama Keying stated that GAC Honda is currently facing two difficulties. Firstly, the Chinese fuel vehicle market has shrunk to 50%. The market size has shrunk, but there are still so many brands, which means that market competition has become more intense. Secondly, in the new energy market, Guangqi Honda's product line has not yet been enriched, which is a shortcoming of Guangqi Honda.
Currently, the sales of Japanese brands in China continue to decline. According to an analysis report by the China Association of Automobile Manufacturers, mainstream joint venture brands sold 570000 vehicles in October, a year-on-year decrease of 17% and a month on month increase of 8%. Among them, the retail share of Japanese brands was 12.9%, a year-on-year decrease of 4.8 percentage points.
In October, the sales of new cars by Honda, Toyota, and Nissan in China were all lower than the same period last year. Among them, Honda's sales in China in October fell by 42.2%, with sales of 75440 vehicles, a continuous decline for 9 months.
Honda Motor's Q2 fiscal year 2025 (July September 2024) report shows that during the reporting period, Honda's operating profit was 257.9 billion yen (approximately 12.1 billion yuan), a year-on-year decrease of 15%. This is the first time in seven quarters that Honda's profit has declined year-on-year.
In order to address the shortcomings in the new energy sector in China, Honda has taken a series of new actions in the new energy field, including launching the pure electric brand "Ye P" and the pure electric platform Architecture W. Regarding the two joint venture car companies in China, GAC Honda has launched the Ye P7. In the next three years, GAC Honda will launch three or more electric vehicles, covering mid to high end sedans and large SUVs. Dongfeng Honda has launched the Ye S7, and by 2030, Dongfeng Honda will have launched more than 10 new energy vehicle models. In the future, Dongfeng Honda will build a new energy brand and series of products under the "H brand" and "Lingxi brand".
The Ye S7 is built on an intelligent and efficient pure electric W architecture and is a product developed in China. Compared with Honda's previous electric vehicles launched in China, the Ye S7 has strengthened its three electric and configuration aspects. This car offers two power forms: single motor and dual motor, with the peak power of the dual motor four-wheel drive model being 350 kilowatts. In terms of cabin, the Ye S7 is equipped with intelligent technology equipment such as BOSE sound system, electronic exterior mirrors, FACE ID.
The launch of Dongfeng Honda Ye S7 and GAC Honda Ye P7 marks a new stage in Honda's transformation towards electrification and intelligence in China. It is worth mentioning that in the production field, GAC Honda has closed its fourth production line with an annual production capacity of 50000 units in October this year. The first new electric vehicle factory will be put into operation in December, and the main models put into production are pure electric models such as the Ye P7 and the currently on sale Jipai 2. The Dongfeng Honda new energy factory has officially started production in October this year, with a planned annual production capacity of 120000 vehicles. The initial production models include the Lingxi L, Ye S7 and other models, which will help the production capacity of related new models climb in the future.