Honda announced on July 20 that it has agreed to continue its joint venture with Chinese state-owned automotive giant Guangzhou Automobile Group for ten years beyond the original expiration date.
With the joint venture’s term set to expire in 2028, attention had focused on how the two companies would proceed amid intensifying competition and sluggish sales in China, the world’s largest automotive market.
Facing a Production Slowdown
Honda and Guangzhou Automobile established their joint venture, Guangqi Honda Automobile, in 1998 under a 30-year contract. Honda stated that the companies will continue to “make maximum use of each other’s technology and resources to keep providing products that meet diverse needs.”
Guangqi Honda’s factories produce the Accord sedan and the Avancier sport utility vehicle. Amid the current sales slump, one factory with an annual production capacity of 240,000 vehicles has been suspended.
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Author: The Sankei Shimbun