The car market is extremely busy, and joint ventures can't handle it.
Recently, it was reported that since May, GAC Honda has started large-scale layoffs in the form of level by level notification, with the scale expected to be thousands of people.
Relevant industry insiders further disclosed that this is an overall layoff involving multiple lines. At present, the internal dimission process has been started, mainly voluntary dimission, and there will be corresponding compensation. It is expected that the layoff action will last until August, but it will be concentrated in May.
14% of employees have left voluntarily
In fact, this is not the first time that GAC Honda has been laid off. On December 2 last year, Honda Motor said that due to the rapid shift to the electric vehicle market, the original sales of fuel vehicles were significantly reduced, and the company would lay off about 900 contract workers from the Chinese joint venture GAC Honda.
At that time, GAC Honda responded that only labor dispatching personnel were involved, and regular employees were not affected.
As for the rumor of layoff, GAC Honda officials still did not deny it. They responded that: this solicitation has just started, employees can put forward their own ideas, and GAC Honda will compensate employees according to laws and regulations. The specific compensation plan has not been determined yet. The plan that the expired labor contract will not be renewed and the labor contract will be terminated through voluntary negotiation is intended to accelerate the transformation of GAC Honda's new energy strategy, and the production will also be adjusted with the reduction of the production team, but the specific adjustment of the production plan is still unclear.
According to the Nikkei Shimbun, as of May 15, more than 1700 employees had agreed to leave, accounting for 14% of the total production staff of the joint venture. In addition, Honda may also reduce the number of operating days of its factories in June.
However, it is not sure whether the turnover rate of 14% has reached the expectation of layoffs of GAC Honda.
You should know that many insiders close to GAC Honda said that the layoff may involve middle managers. "The salary of one section chief is equal to that of two workers. Although there is no direct layoff of section chief yet, subsequent structural streamlining is likely to affect it."
Foreign giants can hardly hide their decline in China
Different from the external praise of China's auto production and sales hitting a record high in 2023, enterprises struggling with market competition are experiencing unprecedented "volume". In order to compete for more market share, in addition to the price war, the automobile enterprises are crazy to build endurance, configuration, volume and fast charging, in order to maintain a certain market share in this chaotic market situation.
In this process, "rolling does not move" seems to be a word that more and more foreign car enterprises often talk about.
According to the data of the Passenger Transport Association, the penetration rate of domestic retail sales of new energy vehicles in April was 43.7%, 11.7 percentage points higher than the penetration rate of 32% in the same period last year. In April, the penetration rate of new energy vehicles among independent brands was 66.8%; The penetration rate of new energy vehicles among luxury vehicles is 22.6%; The penetration rate of new energy vehicles among mainstream joint venture brands is only 7.5%.
The above data also shows that in April this year, the retail sales of mainstream joint venture brands were 450000, down 26% year on year and 9% month on month. In April, the retail share of German brands was 19%, down 2.2 percentage points year on year, and that of Japanese brands was 15.2%, down 3.6 percentage points year on year. The retail market share of American brands reached 5.9%, down 2.6 percentage points year on year.
In terms of each joint venture, according to the terminal data of the Gesch Automotive Research Institute, the cumulative sales of Guangzhou Honda Motor Co., Ltd. from January to March this year were nearly 110000, almost the same as that of the same period last year, and the decline was lower than - 5.35% of Dongfeng Honda, another joint venture of Honda Motor Co., Ltd. in China, and SAIC GM (- 12.82%), Beijing Hyundai (- 11.3%), and Guangzhou Toyota Motor Co., Ltd. (- 10.94%) And other joint ventures.
However, it is worth noting that before this, its sales volume in 2023 had shown -16.68%, leading a group of joint venture car companies to decline, which led to its capacity utilization rate falling to less than 85% in this year.
Therefore, accelerating the transformation and achieving breakthroughs has become a key measure for joint venture car companies that still have the ambition to fight in the Chinese auto market.
"Slimming" for full transformation
In fact, it is not only GAC Honda that is affected by Honda's decline in China. According to the data from the survey company MarkLines, Honda's market share in China in 2023 will decrease by 1.1 percentage points compared with 2021, to 4%. From January to April, the sales volume in China was 280000, down 11% year on year, the largest drop among the three Japanese car companies.
Under the sharp decline in sales, "the department budget is cut in half, and many businesses are difficult to promote without money." "At present, the company has no front desk, and all the green plants have moved away." An employee of Honda Motor in China complained.
With the department budget gone, the year-end bonus is naturally difficult to cash in. As for another employee of Honda Technology Research, "Honda Technology Research's salary was originally lower than the average level of the industry, and the annual salary increase means that, so the year-end bonus has always been an important source of compensation. But last year, it was only half of the guaranteed minimum amount previously promised."
"From last year to the latest layoffs, behind this series of operations, Honda is clearly accelerating its structural reform in China. In such a highly competitive environment in the Chinese market, it is difficult to achieve better results relying on the original model. It is better to concentrate resources on the new generation of technology research and development and industrialization process." The insiders think so.
On April 16 this year, Honda China officially launched a new new energy sub brand "Ye". Unlike the e: N series, which is biased towards the global market, "Ye" is completely customized based on the Chinese market. Its new pure electric architecture, "Architecture W", is independently developed by Honda Technology Research (China) Co., Ltd., and has reached cooperation with many Chinese local suppliers such as Ningde Times, Huawei, Hangsheng Electronics, and iFLYTEK.
According to Honda China's plan, W Architecture plans to launch six models by 2027, and the first wave of models will be officially launched this year, which will be produced and sold by two joint ventures. Among them, "Ye S7" belongs to Dongfeng Honda, and "Ye P7" belongs to GAC Honda.
The second wave of products will be built on the basis of "Ye GT CONCEPT", and the pace of products will be far faster than that of Honda in the past, and will be launched in 2025 at the earliest.
At the same time, Honda e: N brand is still continuously updated, so as to finally realize 100% pure electrification of Honda China's sales models in China by 2035.
However, as predicted by Honda, "the sales volume in China in fiscal year 2024 will be about 1.06 million, down 13% from the previous year, and about 40% lower than the historical record in fiscal year 2020." Before the dawn, Honda may still face a relatively long difficult period in the Chinese market.
