Japanese automakers Nissan and Honda are reportedly considering cutting production in China as they face stiff competition from local automakers like BYD. Nissan is planning to lower its annual production in the world’s biggest auto market by as much as 30%, equivalent to 500,000 cars, the Nikkei newspaper reported. On the other hand, Honda is looking to cut 20% production to around 1.2 million vehicles, the report added.
However, a Nissan spokesperson told Reuters that the contents of the report were not true while a Honda spokesperson said it had not decided to reduce production to about 1.2 million vehicles. Nissan is reorganising production bases with Chinese partners and seeking to use excess capacity to produce cars for export to other countries in Asia, the Nikkei report said.
Japan’s third-largest automaker by volume, Nissan dropped by 16.1% in China last year to less than 800,000 vehicles, as per company data. Honda, Japan’s biggest car maker after Toyota Motor, were down about 10% in China to 1.2 million vehicles over that period, data showed.
Fast-growing Chinese brands have led to foreign rivals losing market share in China. Nissan operates eight factories in the country through a joint venture (JV) with Dongfeng Motor while Honda operates four factories in China through a JV with GAC Group that traces its roots to the late 1990s. Three other factories of Honda operate through another JV with Dongfeng it set up in 2004.
In November, Nissan said it will begin exporting cars from China to other overseas markets from next year, initially aiming for annual volumes of between 100,000 and 200,000 units. Last year, Nissan CFO Stephen Ma said that the company’s sales forecast was scaled back due to its performance in China. Facing similar pressure, a smaller Japanese peer Mitsubishi Motors last year decided to end production of its cars at its JV in the country.