Sales volume plummeted by nearly 30%, Honda announced a strategic transformation, and the industry generally adopted a cautious attitude

GAC Honda recently announced its "Innovative and Intelligent" corporate strategic transformation plan, with the goal of creating a smarter, greener and more efficient corporate image.

It is reported that Honda China will shut down the fourth production line of GAC Honda and the second production line of Dongfeng Honda in October and November 2024 respectively. The annual production capacity of these two production lines is 50,000 and 240,000 vehicles respectively, mainly producing traditional fuel vehicles such as Fit, City, Civic, Accord, etc. This adjustment will reduce the total production capacity of GAC Honda from 1.49 million vehicles to 1.2 million vehicles, a reduction of nearly 20%.

The reason behind this is not difficult to guess - Honda's sales in China have declined sharply.

After experiencing its first negative sales growth in eight years in 2021, Honda has entered an accelerated decline in China. In 2021, 2022, and 2023, sales fell by 3.17%, 4.93%, and 13.66%, respectively.

In the first six months of 2024, Honda's sales fell sharply by 28.28%, which has led to a large amount of idle production capacity. Honda said that the closure of traditional production lines is to optimize the production capacity structure, improve production efficiency, and make room for the commissioning of new energy production lines.

This strategic transformation of GAC Honda is an important measure for it to cope with the automotive industry's transformation towards electrification and intelligence, and is also a key step in its carbon neutrality strategy.

GAC Honda's carbon neutrality strategy is part of its "New Wisdom" plan, which also includes a corporate safety vision of achieving zero traffic fatalities by 2050, as well as optimizing organizational effectiveness and improving labor productivity for all employees. GAC Honda said the plan is its forward-looking layout for the future automotive market and a reflection of its fulfillment of social responsibility.

However, this strategic transformation of GAC Honda has not been unanimously recognized by the industry and consumers.

On the one hand, some people believe that GAC Honda's move to close its traditional production lines is a form of "self-abandonment", giving up its advantages and market share in the traditional fuel vehicle market. The competition in the new energy market is more intense. Whether GAC Honda's product strength and brand power can support its development in the new energy market remains to be seen.

On the other hand, GAC Honda's corporate safety vision, which is to achieve zero fatalities in Honda's two-wheeled vehicles and automobile traffic accidents by 2050, is also considered an "unrealistic" goal. To reduce the traffic accident death rate to zero, not only does the automaker need to pay huge costs and efforts in vehicle safety and intelligence, but it also needs to take into account multiple factors of traffic accidents, such as driver operation, changes in road conditions, and the impact of other vehicles, which are not completely controlled by a single automaker. Therefore, some people believe that GAC Honda's vision is more like a "gimmick" than a "commitment."

In summary, although GAC Honda's "New Wisdom" corporate strategic transformation plan reflects its vision and determination for the future automotive market, it also exposes its shortcomings and difficulties in product strength, brand strength, and technical strength. Faced with the rapid changes and fierce competition in the automotive industry, whether GAC Honda can successfully complete the transformation still has many challenges and problems to solve.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.