As car sales in the world’s largest car market slump, Honda Motor will cut its full-time workforce in China. On Wednesday, the Japanese automaker announced that about 1,700 workers had agreed to layoffs.
Honda’s joint venture (JV) with Chinese state-owned automaker Guangzhou Automobile Group notified employees earlier this month of plans for voluntary layoffs, according to Honda representatives.
Honda’s move is the latest blow to the Chinese automaker, which has been losing market share due to fierce price wars and the dominance of local players such as BYD.
Chinese consumers are moving away from internal combustion engine cars and toward plug-in hybrids and electric cars, a market that makes it difficult for Japanese automakers to compete with local rivals.
The roughly 1,700 Honda employees who chose to retire themselves make up 14 percent of the manufacturing workforce, according to a spokeswoman.
The company decides how many employees it will allow to take voluntary retirement, said the spokeswoman. The total number may vary from 1,700 employees who have decided to leave.
Through a partnership dating back to the late 1990s, Honda operates four factories in China; It operates three more factories through a separate joint venture with Dongfeng, which was established in 2004.
Sales of passenger vehicles in China, the world’s largest car market, fell 5.8% in April from the same month last year, according to data from the China Passenger Car Association, an uncertain economic recovery as consumers are reluctant to spend more.
