Are Nissan and Honda abandoning China?
After Mitsubishi and Mazda, two other Japanese car manufacturers – Nissan and Honda – decide to review their activities in China. Competition with local electric vehicle brands is increasingly difficult. All the details
Japanese automakers Nissan Motor and Honda Motor plan to reduce their production capacities in China due to difficulties competing with local electric vehicle brands.
Those in the Chinese market represent more than 30 percent of Honda's total sales and more than 20 percent of Nissan's. Furthermore, China is worth around 10-20 percent of the net profits of Japanese car manufacturers.
NISSAN'S PLANS FOR CHINA…
Nissan currently produces approximately 1.6 million cars a year in China but – according to revelations from the Japanese newspaper Nikkei Asia – it is preparing to cut its capacity by 30 percent, or 500,000 units.
Nissan operates eight plants in the country through a joint venture with Chinese company Dongfeng Motor; plans to retool some of these facilities to export vehicles to Asia rather than sell them to the Chinese market.
In 2023, Nissan produced 793,000 vehicles in China, falling below one million for the first time in fourteen years. Compared to the previous year, the drop in output was 24 percent.
… AND THOSE FROM HONDA
Honda, however, plans to reduce its production capacity in China by 20 percent, bringing it to around 1.2 million vehicles per year (currently 1.49 million). The Japanese company has two joint ventures with Chinese companies: one with Dongfeng Motor and one with GAC.
JAPANESE CAR MANUFACTURERS ARE STRUGGLING IN CHINA
Another Japanese automaker, Toyota Motor, also saw its sales in China shrink in 2023: they fell 2 percent year-on-year, to 1.9 million units. Last October Mitsubishi Motors announced its withdrawal from China, while Mazda said it was reviewing its joint venture in the country.
Japanese automakers began expanding into China in the 2000s, forming joint ventures with local companies. In 2020, Japanese brands, thanks to the high quality of their vehicles, came to control 20 percent of the Chinese automotive market. Chinese car manufacturers, however, after acquiring technologies and know-how from the Japanese, have moved on to producing electric vehicles on their own, distancing themselves from joint ventures. In 2023, Chinese manufacturers – strong not only in the quality but also in the low price of their models – had a market share of 56 percent at home; the GAC group alone held over 30 percent.
Nissan, Honda and other Japanese brands have struggled to compete with the Chinese in the sector of so-called new energy vehicles (an umbrella term that encompasses all alternative technologies to traditional internal combustion engines). The same goes for German and South Korean companies: in 2023 the market share in China of the former fell by 6.4 percentage points compared to 2019, stopping at 17.8 percent; that of South Korean companies, however, lost 3.1 points, to 1.6 percent.
China is the world's largest market for electric cars, with twenty-five million units sold in 2023. The country is also becoming the top exporter of cars, surpassing Japan.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/nissan-honda-riduzione-produzione-auto-cina/ on Wed, 13 Mar 2024 08:49:36 +0000.