In 2022, Honda sold 1,373,122 new cars in China, a 12.1% decrease from the previous year. Guangqi Honda had 720,716 units sold at the end of the year, while Dongfeng Honda had 652,406 units sold. Notably, by the end of the year, Honda had sold 231,274 electric vehicles, accounting for 16.8% of total sales.
According to Honda, the main reason for the poor performance is a series of issues caused by the COVID-19 pandemic, such as a shortage of components and parts, rise of raw material prices, and other negative events.
Interestingly, despite the fact that countries’ epidemic prevention policy has been lifted and the negative effects of similar outbreaks have diminished, Honda’s sales have not increased significantly this year.
According to Honda China’s most recent data, their terminal sales in the Chinese market were 138,332 units in the first two months of this year (January and February 2023), with a 45.2% decrease year on year. Due to the impact of the Spring Festival holiday, sales volume in January was only 64,193 units, with a 56.2% decrease year on year. Car sales increased to 74,142 in February, but were still down more than 30% year on year.
Guangqi Honda sold 76,113 units, including 35,829 units in February, with a 30% decrease from the previous year. Dongfeng Honda’s terminal sales were 62,219 vehicles, with a decrease of about 30% on year-on-year basis to 38,313 vehicles in February, and Honda’s terminal sales in China fell for the sixth month in a row.
If last year’s poor performance could be attributed to the pandemic, Honda’s poor start of this year can only be attributed to a lack of product power in their current models.
In terms of product line, Honda has updated their main models, including the XR-V, Bin Zhi, CR-V, Haoying, and others. These products, however, are built on traditional platforms, and no matter how they are modified in appearance and interior, no matter how comprehensive the Honda CONNECT 3.0 system is used, they will remain “backward” in design philosophy.
There are related news that Accord will usher in a new generation this year, but they are still working on the exterior and interior, but the power system and other aspects will remain unchanged. Even if they have excelled in the fields of fuel cars and hybrids, oil cars will remain oil cars.
Except for the transition plug-in models, the performance of Honda’s two small pure electric SUVs, the e:NP1 and e:NS1, is truly unsatisfactory in terms of new energy product lines. Consumers can buy domestic compact models with longer endurance and higher intelligence for the same price range of 175,000 to 218,000 yuan.
To summarize, Honda is under severe sales pressure in the Chinese market. In order to reverse the situation asap, Honda announced on January 30th this year a comprehensive restructuring of the corporate structure in China in order to accelerate product electrification.
Specifically, HMCT, a wholly owned subsidiary of Honda in China, will be merged with EGCH, and EGCH’s business will be handled by Manufacturing Technology Guangzhou branch of Honda Technology Research (China) Co., LTD .
Honda has reduced its six global markets to North America, China, and other regions besides these countries in an effort to cut costs, and plans to establish a new electric-development unit to focus more on its electric-car business.