news

interface news reporter | zhou shuqi yang shihan

hondathe automobile industry may be the most aggressive auto company in optimizing labor costs and reducing production capacity in the chinese market. after guangqi honda laid off more than 2,000 employees in may, dongfeng honda, another honda joint venture in china, also recently launched a large-scale layoff with voluntary resignation as the core method.

an insider who has worked at dongfeng honda for two years confirmed to jiemian news that dongfeng honda provided nearly 2,000 resignation channels and the compensation could be "n+3". the laid-off employees were mainly production line workers. this was the first time the employee had experienced a large-scale layoff since joining dongfeng honda.

on september 10, dongfeng honda responded that the optimization was to improve the company's operational efficiency and accelerate strategic transformation. the optimization will mainly focus on the production field, and will adopt the form of voluntary resignation of employees and provide employees with appropriate and reasonable compensation plans.

jiemian news noticed from the dongfeng honda forum that since july, there have been related posts saying that internal statistics on negotiated resignations are being conducted. at the end of august, employees began to resign in batches, and related videos and posts posted by dongfeng honda's resigned employees appeared on multiple social platforms. due to the high compensation plan, some dongfeng honda employees actively fought for layoffs.

dongfeng honda adopts the "n+2+1" compensation plan, where "n" represents the number of years of service, "2" refers to two months' salary, and "1" represents an additional one-month bonus. dongfeng honda said that based on the feedback from the implementation, many resigned employees are satisfied with the compensation plan.

dongfeng honda's massive layoffs were foreshadowed. due to the sluggish performance in the chinese market, honda plans to cut 30% of its fuel vehicle production capacity in china by closing factories and other measures, reducing its annual production capacity from 1.49 million vehicles to 1 million vehicles. this production cut is the largest among japanese automakers.

among them, dongfeng honda issued a statement on july 26 this year, saying that the production line of dongfeng honda's second factory in wuhan, hubei will be suspended in november 2024. the annual production capacity of this factory is 240,000 vehicles. blue whale news quoted an insider as saying that the second factory has not been closed and r&d and laboratories have been retained.

there is no news of layoffs outside the production field. jiemian news learned from people from several joint venture brands that due to the poor performance of the company and the lack of improvement in the short term, many people from joint venture brands chose to switch to new forces or domestic independent brands. there are quite a few people who have lost naturally.

honda plans to cut about 3,000 jobs in its china business through layoffs and natural attrition at gac honda in fiscal 2024 (ending march 2025). however, the staff cuts at dongfeng honda are not included, and the cuts may be larger.

last decemberguangqi honda has already started laying off employees. according to japanese media reports, guangqi honda laid off about 900 employees at that time, which was the first layoff in guangqi honda in 25 years.

as the penetration rate of new energy vehicles exceeds 50%, becoming the mainstream choice for consumers when buying cars, joint venture automakers that lack new energy models will find it difficult to stop the continued downward trend in sales.

honda's new car sales in china in august fell 44% year-on-year, and have been lower than the same period last year for seven consecutive months. dongfeng group's production and sales report shows that dongfeng honda's cumulative sales from january to august fell 19% year-on-year; guangqi honda's cumulative sales in the first eight months were only 270,000 vehicles, a year-on-year decline of 26.81%.

despite a sharp drop in sales in china, honda's consolidated operating profit for the april-june period set a new record for the same period. in the us market, honda's sales for the april-june period increased by 3%, achieving 16 consecutive months of growth, thanks to a surge in sales of hybrid models.

joint venture automobile brands used to be good companies that automobile professionals scrambled to enter, as they could offer higher salaries and generous year-end bonuses that were ahead of domestic brands in the industry. however, with the continued sluggish performance, their past halo is no longer there.

according to data released by the china passenger car association, mainstream joint venture brands sold 480,000 vehicles in august, a year-on-year decrease of 27%; in the first eight months, sales of domestic brand passenger cars exceeded 10 million, with a market share of 63.2%.

joint venture car brands have generally seen excess fuel vehicle production capacity, and the oversupply market environment has made them more cautious about production.faw-volkswagenthe foshan factory also carried out personnel optimization. it did not renew the contracts of some employees whose first labor contracts expired, and provided "n+1" or "n" months of compensation.

yang jing, director of corporate ratings for asia pacific at fitch ratings, said in an interview with jiemian news that the transformation of joint venture brands has entered a critical execution period. they have financial and technical reserves, but what is worrying is that the decision-making process is long and the speed of model launch is difficult to adapt to the current market environment of rapid iteration of domestic independent brands. this will be a special test of whether the pace of joint venture brands can be consistent.