Honda, Nissan considering cutting China capacity, Nikkei reports

NISSAN Motor is considering a 30 per cent reduction in production capacity in China, while Honda Motor intends to cut 20 per cent, the Nikkei reported. 

The Japanese carmakers are struggling in the face of increased local competition from manufacturers such as BYD as electric vehicles take hold in China, the newspaper reported, without saying where it got the information. 

Honda’s output last year was around 1.2 million versus capacity of 1.49 million, so there is room to rationalise, a spokesperson for the carmaker said. A representative for Nissan wasn’t immediately available for comment.

Honda and Nissan sales in China have been falling for at least three years, while Toyota Motor has been mostly flat. The main issue has been the lack of attractive electric-car offerings from the trio. Japanese cars are mostly produced and sold through joint ventures with local partners. Guangzhou Automobile Group has partnerships with Toyota and Honda, while state-backed Dongfeng Motor Group has ventures with Honda and Nissan. 

Nissan may cut annual production capacity by as much as 500,000 from the current level of 1.6 million, the Nikkei reported. Honda is looking at reducing annual output to about 1.2 million, according to the newspaper. BLOOMBERG