File photo shows a GAC Honda P7 EV. Credit: CnEVPost
- The two parties extended the term of their GAC Honda joint venture through 2038 while keeping their ownership structure unchanged.
- GAC Honda has come under mounting sales pressure, with first-half sales falling 55.82% year-on-year.
Honda and GAC Group (HKEX: 2238) have signed an agreement to renew their GAC Honda joint venture, extending the partnership through 2038 while keeping their ownership stakes unchanged.
Honda China announced the renewal in a statement on Monday, as competition in China’s auto market intensifies and joint-venture brands continue to lose market share.
Founded in July 1998, GAC Honda was Honda’s first joint venture in China responsible for vehicle production and sales. GAC and Honda each hold a 50% stake.
The joint venture has sold more than 11 million vehicles cumulatively to date.
With the partners’ initial 30-year cooperation period approaching its expiration, there had been speculation that renewal talks had reached an impasse because GAC was seeking greater control.
China is now the world’s largest auto market, and competition is becoming increasingly intense as electrification and intelligent-vehicle technologies develop rapidly, Honda China said.
Against this backdrop, Honda and GAC will leverage their respective technological and resource advantages to help GAC Honda rebuild its core competitiveness and accelerate its transition toward new energy vehicles (NEVs), it said.
Notably, the joint venture’s sales have declined significantly in recent years.
GAC Honda sold 14,099 vehicles in June, down 53.03% year-on-year. Its first-half sales fell 55.82% to 68,318 vehicles, according to data released by Honda China.
GAC Honda Monthly Sales 2024-2026
Month
2024
2025
2026
January
35,282
15,123
4,558
February
29,107
29,676
9,220
March
52,587
47,930
26,283
April
24,673
18,491
5,100
May
31,931
13,410
9,058
June
34,350
30,017
14,099
July
33,270
16,033
August
32,839
20,417
September
35,130
32,808
October
42,371
35,671
November
39,143
41,366
December
79,950
50,984
GAC Honda monthly sales
2024
2025
2026
The decline in production was even steeper. GAC Honda produced 5,201 vehicles in June, down 83.22% year-on-year, while first-half output fell 49.85% to 82,884 vehicles.
By comparison, GAC Group sold 144,866 vehicles in June, down 3.47% year-on-year. Its first-half sales rose 2.35% to 773,085 vehicles.
GAC Honda plans to launch 3 new models in 2027 spanning gasoline-powered, hybrid and NEV segments, according to previously announced plans.
The models will include a new-generation Accord, a new product featuring Honda’s fifth-generation i-MMD hybrid technology, and a in-house developed model based on a China-focused NEV platform.
Honda plans to export its China-made e:NS2 pure electric vehicle to Japan and revive the Insight brand to expand its domestic EV lineup.
