Caixin News Agency, March 13th (Reporter Liu Yang) - The mainstream Japanese brands that collectively encountered "Waterloo" are gradually fading away in China. On March 12th, according to media reports, Nissan has planned to reduce its production capacity in China by up to 30% and will negotiate with local joint ventures; On the other hand, Honda also plans to reduce its production capacity in China by 20%.
In response to the above news, both Nissan China and Honda China stated today that "the company has not disclosed any relevant information to the public at present." As another shareholder of the joint venture, GAC Group responded to reporters that it has not received any information regarding Honda's plan to reduce its production capacity in China by 20%.
It is reported that the two major Japanese car manufacturers made the above decision because China is accelerating its electrification transformation, and Japanese companies are facing pressure to rebuild their strategies in China. Data shows that in February, Nissan's sales in China, including passenger cars and light commercial vehicles, were 41824 units, a decrease of 36.20% compared to the previous month. Among them, Dongfeng Nissan (including Nissan, Qichen, and Infiniti brands) sold 38918 vehicles, a decrease of 37.36% month on month; Honda's terminal car sales in China were 45498 units, a year-on-year decrease of 38.63%.
The large-scale rise of pure electric vehicles in China has had a huge impact on the production and sales of Japanese branded fuel vehicles in the Chinese market. According to industry insiders, although Japanese cars have certain technological advantages in the field of new energy vehicles, their new energy vehicle strategy in the Chinese market seems to have not been fully implemented, which also affects their market position to a certain extent.
In the past period of time, the retail market share of Japanese joint venture brands in China has fluctuated, with a low point of only about 16%. The latest data from the China Association of Automobile Manufacturers shows that the total retail sales of mainstream joint venture brands in February were only 330000 vehicles, a decrease of 31% compared to the same period last year, and a significant decrease of 51% compared to the previous month. Of particular concern is that the retail share of Japanese brands has dropped to 14.4%, a decrease of 3.4 percentage points compared to the same period last year, which clearly reflects the deepening dilemma of Japanese car companies in the domestic market competition.
The overall weak sales of Japanese brands have also brought tremendous pressure to joint venture partners. Recently, Dongfeng Motor Group announced that compared to its net profit attributable to shareholders of 10.265 billion yuan for the 12 months ended December 31, 2022, the company expects a net loss attributable to shareholders of no more than 4 billion yuan for the 12 months ended December 31, 2023. In 2023, Dongfeng Honda's cumulative sales volume was 604800 units, a year-on-year decrease of 8.54%; Dongfeng Nissan's sales volume was 723139 units, a year-on-year decrease of 21.53%, resulting in a combined loss of nearly 300000 units. In addition, Honda announced in December last year that its joint venture in China, GAC Honda, had laid off 900 employees, which is equivalent to 7% of the joint venture's approximately 13000 employees. The reason for the layoffs is the rapid shift towards the electric vehicle market. This is another Japanese automaker that has reduced production scale in China after GAC Toyota laid off employees, GAC Mitsubishi ceased production, and FAW Toyota reduced production.
"Japanese car companies have suffered a crushing defeat." The aforementioned industry insiders stated that the rise of new energy vehicles has a comprehensive impact on traditional cars, involving production modes, market competition, supply chain, employment, and energy structure, which will also promote the reconstruction of energy consumption structure and market, "Faced with increasingly fierce competition from local manufacturers such as BYD, how Japanese car companies can stabilize and expand their market position will undoubtedly be a deep test of their intelligence and strength."