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Author: Cao Jiadong

Editor: Yang Jing

Editor: He Zengrong

How are traditional joint venture brands doing in China today?

The decline in sales over the past six months has led many people to conclude that this era no longer belongs to the "arrogant" ones. The rise of too many Chinese automakers has made those who have grasped the traffic code, including Honda,ToyotaJapanese brands, including, have been put in the queue to exit China.

In this battle of industry transformation, we do not deny that compared with Chinese cars, Japanese brands, which are slow to warm up, will face very difficult issues. When faced with the demands of Chinese consumers, giving irrelevant answers has become the norm.

Toyota bZ4X launched,Nissan AriyaThe failure of all new pure electric vehicles such as Honda e: NP/S1 is attributed to the fact that Japanese car companies do not understand what Chinese users need. Not only do they have no idea about the R&D strategy of "refrigerator, color TV, and sofa", but they also find it difficult to make a name for themselves in intelligent devices.

"The Japanese are too stubborn." Seeing the outrageous operations of Japanese cars in recent years, bystanders always like to summarize the problem this way. But after decades of developing the automobile industry, are Japanese car companies really so unbearable? Toyota, Honda,NissanAre you willing to be scolded away by Chinese netizens?

Indeed, when the entire market is filled with voices of pessimism about the decline of joint ventures, their resistance often seems powerless. Not to mention why Japanese brands are sitting on pins and needles, from Volkswagen, GM,FordEven for BBA and others, it is normal for everyone to be questioned and abused.

Here, we do not want to delve into why the Chinese auto market has become like this in a short period of time, and why the entire industry only allows one voice to exist. For these foreign auto companies that seem to be on the wrong path in transformation, as long as you are willing to calm down and look at the future development of the industry from a development perspective, it is actually more important to understand the logic of their transformation than to verbally attack them.

Unwarranted accusations cannot bring positive energy to this industry. If China's automobile industry wants to truly complete its transformation, it must not be achieved by relying on policy dividends, verbal support, or sacrificing the health of the industrial chain.

When a joint venture brand talks about increasing investment in electrification, what is the outside world's reaction? You can get a rough idea by just looking through any related netizen comments.

By the same token, recently, when Tian officially announced that he would implement capacity optimization, most of the onlookers seemed to have no positive voices except for sarcasm.

In their view, ever since Honda President Toshihiro Mibe released the timetable for Honda's electrification transformation, Honda's pure electric vehicles in the Chinese auto market are still difficult to be competitive, which has determined Honda's future development.

To be honest, in terms of sales, I believe Honda itself cannot deny that it has been too cautious in this process. The problems reflected in the multiple trials of pure electric products must have really reached its ears.

Given this situation, how will Honda respond? Will it just lie down and wait for the market to rebuild, or will it make new plans? In fact, this capacity optimization has largely answered this question.

Officials pointed out that Honda currently has seven vehicle production lines in China with a total annual production capacity of 1.49 million vehicles. After GAC Honda plans to close the fourth production line with an annual production capacity of 50,000 vehicles in October 2024, and Dongfeng Honda will suspend production of the second production line with an annual production capacity of 240,000 vehicles in November, the adjusted total production capacity will increase from 1.49 million vehicles/year to 1.2 million vehicles/year.

On the other hand, Dongfeng Honda's new dedicated electric factory under construction will be put into production in September 2024, and GAC Honda's new new energy factory will be put into production in November 2024.

You can simply think that in today's market environment, Honda's total planned production capacity in China has been reduced. At a time when electric vehicles are entering the Chinese market in large numbers and squeezing the living space of joint ventures, Honda has no choice but to do so.

The Chinese auto market is changing too fast. So fast that even those in the industry think that it is normal to complete product iteration in one year and technological leap in two years. In view of this, whenever we see the slow pace of transformation of joint venture brands, we will feel disappointed.

But to be honest, as a car company that is stubborn in nature, Honda was able to reallocate production capacity in a timely manner under the premise of a very unfriendly environment. For it, it is already a big breakthrough.

Honda is well aware of the pressure brought by electrification. From President Toshihiro Mibe to the leaders of the two joint ventures in China, they are all actively seeking new transformation plans.

At this moment, Honda is willing to increase the construction of new energy factories in addition to reducing traditional production capacity. From a rational point of view, this is one of the best solutions Honda has given to the changes in the Chinese auto market.

Honda's attitude towards electrification in the global market shows that China's importance to Honda has never been reduced. However, compared with Chinese automakers, which have changed the pace of the industry's evolution like a cheat, Honda spent two years to complete the infrastructure before the transformation, and it seems that it can't keep up with the pace of market change.

In April this year, Honda (China) solemnly announced its new electrification strategy, the launch of the new brand "Ye" and the unveiling of the prototype of the latest generation of pure electric vehicles.

Regardless of whether such a move means that Honda has undergone a qualitative change in its self-transformation, in the entire joint venture camp, I think Honda's response speed is not much slower than Volkswagen, Toyota, and GM.

In the entire joint venture echelon, each automaker has its own ideas about the understanding of the electrification transformation of the Chinese auto market. In recent years, the tricks they have played have also been seen by the outside world.

Among them, we have seen Volkswagen actively bowing to the Chinese market, selling cars at low prices on the one hand and opening more "joint venture divisions" on the other hand to share the pressure, and Toyota has begun to choose to join hands with Chinese manufacturers to build cars, up toBYD、Guangzhou AutomobileSuch vehicle manufacturers, down to technology companies such as Huawei and Baidu...

Compared with these two companies, there are some strange behaviors like Hyundai and Ford, which know that it is difficult to compete with Chinese automakers, and then turn to other market segments. But in general, in order to cope with the rapid changes in the Chinese market, the joint ventures with rich financial resources are still strong.

Today, although the industry is developing more and more unpredictably, reality is still fair. No matter how difficult it is, as long as you can hold on, there is still hope for the future.

Looking back over the past six months, under the shadow of price wars, the situation of joint ventures has indeed shown an unsatisfactory trend.

Even for Honda, which is not a small company, the intensity of this internal war exceeded expectations. In addition, the core models with their own IP attributes were targeted by many Internet celebrity models, and the pressure on Honda's survival in China increased sharply.

However, for GAC Honda and Dongfeng Honda, facing such development momentum, no matter what the external environment is like, given the scale, how can Honda allow the market to give it a cold shoulder?

At the beginning, I said that relying on the industrial accumulation formed in China over the past 20 years, there is no reason for these traditional giants to easily bow down and admit defeat in the Chinese market.

Therefore, even though Honda wants to optimize its production capacity at this time, after all, based on its own understanding of the trend of the Chinese auto market, the apparent lateness does not mean that everything Honda does is passive.

From the sales data in the first half of the year, we can see that Honda sold a total of 415,906 new cars from January to June. Compared with the same period, there was indeed a large fluctuation, which shows that the decision made by Honda at this time is very necessary.

Perhaps on the Internet, out of hostility towards joint venture brands, the voices of pessimism are still endless, and Honda is powerless to change it. But seeing this situation, Honda can't really give up on itself.

It seems that in order to narrow the gap with Chinese new energy vehicle companies as soon as possible, Honda has now made a bold move to reduce the layout of conventional production lines. As a bystander, instead of indiscriminately rolling our eyes at the changes it has made, can we kindly give it some more time?

This year, two new pure electric vehicles under Honda's "Ya" brand may appear in front of consumers in mass production, and their source must be the two new energy production lines that have been selectively ignored. And from the previous prototypes, it can be seen that Honda's most orthodox electrification strategy will be reflected in these two models one by one.

Whether it is good or bad, everything will give us the most real answer at that time. "Implementing production capacity optimization and accelerating electrification transformation" is just Honda's explanation for its current actions. Maybe the subsequent development will keep up with the trend of China's new energy market as expected?