The transition from gas or petrol-powered cars to electric vehicles (EVs) continues to take a toll on carmakers, particularly in China, which has seen a rapid surge in EV sales.
Honda Motor acknowledged this on Saturday, when it said it was dismissing about 900 contract workers at a joint venture in China.
Japanese automakers have been slow to shift to electric vehicles in the world’s largest car market.
The latest move amounts to a cut of about 7% of the venture’s workforce of about 13,000, the spokesperson said, but the group declined to say which models production were being cut.
“Production volume is decreasing, so dispatch contracts are terminated in line with that,” the spokesperson said of the employees, hired through dispatch agencies, at Honda’s venture with China’s state-owned Guangzhou Automobile Group.
Toyota Motor has halted production on some ageing lines at a joint venture in China, a spokesperson said on Saturday after a media report that it was partially suspending production due to weak sales.
Honda, which is Japan’s biggest automaker after Toyota, is facing strong headwinds in China.
Its production there was down by about a fifth for the first 10 months of the year compared to the same period last year.
Honda sold 3.2 million vehicles worldwide in January-October, helped by robust demand in the United States. Sales in China, accounting for 30% of the total, fell nearly a fifth from a year earlier.
- Reuters with additional editing by Jim Pollard