AutoBeta(AutoBeta.net)06/05 Report--

On June 5, Honda China released its latest sales report. Data show that Honda's China terminal sales in May 2024 were 66202, down 34.66% from a year earlier to 346940 from January to May, compared with 83.3% in the same period, or 16.71% lower than the same period last year.

Honda China did not release sales figures for its two joint venture brands Guangzhou Auto Honda and Dongfeng Honda. It should be noted that Honda, one of the three giants of the Japanese system, is in a far more difficult position in the Chinese market than expected. Honda's sales in China rose 57.28 per cent in January from a year earlier to 100960 vehicles, and then fell by double digits from February to May, down 38.63 per cent, 26.32 per cent, 22.18 per cent and 34.66 per cent, respectively, according to official figures. Honda's sales in China fell 12.07 per cent and 10.12 per cent year-on-year in the past 2022 and 2023, respectively, to 1.3731 million and 1.2342 million respectively.

Honda Chinese officials did not explain the decline in sales. "Automotive Industry concern" believes that it is mainly related to Honda's poor performance in the new energy sector and the inactivity of fuel cars. With the great innovation in the car market, the rapid rise of China's own brands and the decline in sales of joint venture car companies, especially the once glamorous Japanese joint venture brands have been overshadowed.

Of course, it is undeniable that compared with other Japanese joint ventures, Honda is determined to transform the electrified sector, and the performance of its goal is more "radical". Honda has previously announced that it will no longer launch new fuel cars by 2027 and will launch more than 10 all-electric models by 2030. Prior to this, Honda launched the pure-electric brand EVR N in 2021 and has already laid out e:NP1/e:NS1 and e:NP2/e:NS2 pure-electric models, which unfortunately failed to win consumers' approval in the car market. Retail figures show that in April, e:NS1 sold 186 vehicles; e:NP1 sold 117. In short, neither GAC Honda nor Dongfeng Honda has a pure electric model that can carry the banner of sales.

With the white-hot of the new energy market, Honda's performance in the Chinese market is increasingly depressed. To slow the decline in sales, Honda has developed a more aggressive transformation plan in China. On May 16th, Honda held a press conference on car electrification. Honda will invest 10 trillion yen in electrification by 2030, double the 5 trillion yen Honda promised in April 2022. For the Chinese market, Honda China will launch 10 pure electric models by 2027, and 100% of all electric vehicles will be sold by 2035. In addition to the current launch of the eROR N series, specific products will continue to expand the lineup of pure electric vehicles through the release of the new pure electric vehicle "Ye" brand.

In April, Honda China launched a new electric brand, Ye, whose models will be based on the all-exclusive architecture of pure electric car Architecture W. two models of the brand, Ye S7 and Ye P7, have been unveiled at the 2024 Beijing Auto Show, which will be mass-produced by Dongfeng Honda and Guangzhou Auto Honda respectively. According to the plan, by 2027, the "Ye" brand will launch a total of 6 new cars. In addition, Dongfeng Honda will also launch the first model of its own brand Lingzhi L this year. Lingzhi brand will have a new LOGO logo, its products will be based on a new pure electric platform, and Lingzhi L will be the brand's first car model.

The most immediate reason for Honda's collapse in China is related to the acceleration of the shift from fuel vehicles to new energy vehicles in China, although sales have fallen not just for Honda, but for Japanese brands as a whole. The retail share of Japanese brands was only 15.2 per cent in April, down 3.6 per cent from a year earlier and the lowest since 2013, according to the federation.

To accelerate the development of electrification, Honda aims to make electric and fuel cell vehicles account for 40 per cent of its global sales by 2030 and reduce the manufacturing cost of electric vehicles by more than 30 per cent, according to Honda's chief executive. What needs to be faced squarely is that at present, Honda does not have a popular pure electric model in China. Although Honda is also taking a variety of measures to accelerate the electrification transformation, with the continuous expansion of the new energy vehicle market, including BYD, Geely and many new car-building brands continue to seize market share in the field of new energy electrification, it is not easy for Honda to achieve transformation in China. At the moment, Honda is still in dire straits in China, and if it wants to have more chances of winning, it may need to do more to make Chinese consumers feel better about it.

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