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on september 10, dongfeng honda officially issued a statement saying: "in order to ensure the sustainable operation of the company and accelerate the electrification transformation, dongfeng honda further improves the efficiency of personnel in the production field. this personnel optimization is a phased adjustment of the company's strategic transformation. we will adhere to the corporate philosophy of 'people-oriented', fully consider the wishes of employees, and formulate reasonable solutions in accordance with laws and regulations."

not long ago, guangqi honda was caught in a layoff storm, and dongfeng honda was not spared. "qichebatan" learned from dongfeng honda's internal staff that dongfeng honda is expected to lay off 2,000 people, and dongfeng honda will give the laid-off employees n+2+1 compensation ("n" represents the number of years of work, "2" refers to two months' salary, and an additional one month's bonus).

due to the high compensation standards, some media reported that the compensation policy even caused some employees to line up to "rush to be laid off." in addition to the high compensation, it was also reported within dongfeng honda that some departments held a farewell ceremony for laid-off employees. regarding this statement, dongfeng honda's internal staff revealed that the truth was slightly biased. there was no "rush to be laid off" during this layoff, and the farewell ceremony was just a caring measure by individual departments.

new energy transition reduces employment

as we all know, the penetration rate of new energy in china's automobile market has exceeded 50%, so major automakers have entered the new energy market. dongfeng honda, a major joint venture automaker, has been criticized for its slow transition to new energy for a long time. now that it sees the huge potential of the new energy market, it has to step up its transformation efforts and embrace new energy vehicles.

dongfeng honda announced on july 26 this year that it will optimize and adjust its production capacity structure in order to promote its electrification strategic transformation. it is reported that the company has three vehicle factories and a new energy factory under construction in wuhan, hubei. among them, the second factory will suspend production activities from november 2024, while the new energy factory is expected to be officially put into operation in september of the same year.

according to dongfeng honda's internal staff, the suspension of production at the second plant is not a permanent closure, but a part of a strategic adjustment, and the plant facilities, including the r&d center and laboratory, will remain. this decision reflects the severe challenges that dongfeng honda is currently experiencing in the fuel vehicle market.

at the same time, insiders also pointed out that this capacity optimization is closely related to the suspension of production at the factory. as the problem of overcapacity caused by the decline in sales has become increasingly prominent, the company is adjusting its personnel in the production field. at the same time, dongfeng honda's newly opened new energy vehicle factory has a higher degree of automation and the number of workers is significantly lower than that of the fuel vehicle production line, so it is natural to lay off a large number of production line workers.

sales volume declines, cost reduction and efficiency improvement

dongfeng honda suddenly laid off 2,000 employees. in addition to the obvious decline in the number of employees in its new energy factory, dongfeng honda's continued sales decline and the hope of reducing costs and increasing efficiency through layoffs are also important reasons for the layoffs.

honda motor suffered a significant decline in new car sales in the chinese market in august, with a year-on-year decline of 44%. this decline has lasted for seven months, and sales have failed to surpass the same period last year. the production and sales data released by dongfeng group further revealed the plight of dongfeng honda, with its cumulative sales from january to august falling by 19% year-on-year. looking back, dongfeng honda's sales decline has actually begun to show signs three years ago. from the peak of 850,000 vehicles in 2020, it has decreased year by year. by 2022, it has fallen below the 700,000 mark, falling to more than 650,000 vehicles, and the annual sales in 2023 have been reduced to more than 610,000 vehicles. once upon a time, joint venture car brands were a popular choice for people in the automotive industry, known for their higher salaries than independent brands and generous year-end bonuses, but now, with the continued sluggish performance, its former glory has been eclipsed, and it has even fallen to the point where it needs to cut costs through large-scale layoffs.

at present, the fuel vehicle production capacity of joint venture auto brands is generally in excess, and the oversupply market environment has made them more cautious in their production decisions. dongfeng honda is not an isolated case. faw-volkswagen foshan factory also carried out personnel optimization in may this year, and did not renew the contracts of some employees whose contracts expired, but provided corresponding financial compensation.

industry experts believe that dongfeng honda's pace in the new energy transformation is not firm enough, which has led to the current situation. although it has launched a number of electrified products, such as honda cr-v phev, insignia phev, and pure electric vehicles e:ns1 and lieguang e:ns2, the market response is mediocre. in particular, lieguang e:ns2 and honda cr-v phev have not exceeded 500 units in monthly sales, while honda e:ns1 and insignia phev have had even poorer sales in recent months, and it is difficult to break the 100-unit mark.

faced with the sales dilemma, dongfeng honda has quickly adjusted its strategy and made it clear that it will fully promote the electrification process. its new energy plant is scheduled to be put into operation in september this year, mainly producing pure electric models such as lingxi and ye series, and plans to launch more than 10 pure electric models by 2030. what is particularly noteworthy is that the lingxi l, which dongfeng honda has high hopes for, will be launched in the second half of this year. as the first model of the lingxi brand, it carries dongfeng honda's high hopes for electrification transformation and sales counterattack.

with the strong rise of domestic new energy vehicles, the advantages of japanese cars in fuel economy no longer exist. at the same time, the shortcomings of japanese cars in configuration and intelligent driving are becoming increasingly prominent. in addition, dongfeng honda's lag in product updates and the slow pace of electrification transformation have made it face huge market risks. this large-scale layoff involving more than 2,000 people is also an important measure for dongfeng honda to avoid risks.