Honda’s China Sales Plummeted 60% - Now It’s Doubling Down With a 10-Year Extension

62 million vehicles in 2020 to just 640,000 last year. But rather than retreat, the Japanese automaker is digging in. It just announced a 10-year extension of its joint venture with Guangzhou Automobile Group (GAC), pushing the partnership through 2038. The original deal was set to expire in 2028.

The GAC joint venture has been running since 1999 and has produced more than 11 million cars. Still, the market has shifted hard. Chinese buyers are increasingly choosing local brands that offer competitive pricing and strong tech. Honda’s total China sales last year included 340,000 vehicles from the GAC venture and the rest from its Dongfeng partnership.

62 million it sold just five years ago.

A Honda spokesperson told Nikkei Asia that the extension allows the company time to assess the fast-changing market. But commitment alone won’t fix the problem. Honda needs to deliver cars that Chinese buyers actually want. In 2024, it launched the Ye series of EVs in China, including the GAC-built P7 and the Dongfeng-built S7.

Neither has made much of a splash. The company’s next round of models will have to do better if it hopes to climb out of this hole.