Honda's China sales crash 53% to 80,000 units this year as local EV rivals surge

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GAC Honda is looking to boost local production efficiency by 20 percent.

The company is aiming to establish more than 1,000 new sales locations.

Sales of the brand’s models have dropped 53 percent this year to 80,000 units.

Honda and GAC recently confirmed their China joint venture will run through 2038, and the partners have since laid out a plan to speed up development of future EVs so they can keep pace with the country’s newer brands. Domestic upstarts have been turning out fresh EVs faster than the old guard can answer, and Honda desperately needs to stop the bleeding in a market where its sales have fallen off a cliff.

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Over the next two years, Honda and GAC will jointly develop a pair of electric models built for China and sold there alone. Two all-new hybrids arrive on the same timeline, giving the venture four fresh electrified vehicles inside the same two-year window.

Read: Honda’s China Sales Fell 60% In Five Years, So It Signed Up For 10 More Years

Crucially, GAC Honda has revealed it will better integrate supply chain resources in the country, aiming to halve costs, cut the man-hours required to develop new models, and slash lead times. GAC vice president Lin Zhibin added the companies are also looking to improve production efficiency by 20 percent, Auto News reports.

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Developed In China For China

GAC Honda Accord

It won’t be teams in Japan that lead the creation of new models. Instead, GAC Honda will have local teams “living on the ground here every day to define what cars Chinese people want .” This will include vehicle connectivity features which are developed in China.

The collaboration won’t stop there. GAC Honda will work more closely with existing GAC dealerships and service networks, aiming to establish more than 1,000 new sales outlets across the country.

GAC Honda P7

A closer relationship is exactly what Honda needs if its China operations have any hope of surviving the local competition. Last year, GAC Honda sold just 352,000 vehicles in the country, down from a 2020 peak of 807,000. This year has been rougher still. Through the first seven months of 2026, GAC Honda sales have dropped 53 percent to roughly 80,000 units.

Limited details are known about the next-generation models, which are being developed by GAC and Honda. The all-electric P7 , unveiled in 2024, is among its newer models, but it’s so far failed to take off.

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GAC Honda P7