“Such a price is virtually a ‘zero down payment’ car purchase,” said a salesperson at a Guangzhou Honda dealership in Beijing on December 16th, pointing to a 2025 Honda Accord luxury edition and detailing the discounts with a calculator. This B-class sedan, with a guided price of 197,800 yuan, has seen its bare car price drop to the 100,000 yuan range after a series of subtractions.
For this “god car” that has been in China for 25 years, such a “骨折价” (a price cut so deep it’s like breaking a bone) undoubtedly has symbolic significance. Yet, even with this, the sales store remains cold and empty, with the eye-catching advertisement of a 65,000 yuan discount failing to attract customers, leaving only bored staff killing time.
The halving of the Accord’s price is also a microcosm of Honda’s crisis.
Despite the price drop in China mainland, sales did not meet expectations. According to the production and sales announcement released by GAC Group, GAC Honda’s sales in November were 39,143 units, a 36.64% decrease from 61,778 units in the same period last year. From January to November this year, GAC Honda’s cumulative sales were 390,700 units, a year-on-year decline of 30.38%.
Globally, the global production of Japan’s eight major car companies from April to September 2024 was 11.8783 million vehicles, a decrease of 6% year-on-year. Among them, Honda decreased by 8.1%.
How to solve the crisis of Japanese cars in China market?
On December 18th, media reported that Honda and Nissan will merge, and both parties are discussing the establishment of a holding company, and Mitsubishi will also be considered for inclusion in the future. In response, Honda Executive Vice President Aoyama Masashi responded that Honda is considering several options, including mergers, capital cooperation, or the establishment of a holding company.
Honda Accord: The Decline of a Legendary Car
108,800 yuan, about 14911 US dollar, this is the bare car quote for the Accord given by a Guangzhou Honda 4S salesperson in December 2024, including the government’s old-for-new subsidy. For a model that has been popular in China for over twenty years, such a price is quite a sigh.
If you visit GAC Honda’s official website, you will see a particularly eye-catching advertisement that reads “Accord 25th Anniversary.” 25 years ago, when GAC Honda introduced this model to China, the price was as high as nearly 300,000 yuan.
When the joint venture Honda Accord was introduced, Toyota’s Camry was not yet produced in China. The Honda Accord, along with the Volkswagen Passat and Santana, together built the impression of joint venture cars for the Chinese people.
The above quote is for the 2025 Honda Accord fuel luxury edition terminal selling price. On the official website, the guided price for this model is still 197,800 yuan.
Guangzhou Honda 4S store salesperson said that if you buy a car with a loan, you can apply for a cash discount of 72,000 yuan and a replacement subsidy of 7,000 yuan provided by the dealer.
According to the loan plan, the purchase of a Honda Accord 2025 fuel luxury edition sedan only requires a down payment of 11,800 yuan.
At the same time, the salesperson also said that if you open a ticket from a certain other province, you can get an additional 10,000 yuan of government old-for-new subsidy. This means that, without counting the reimbursement, purchase tax and other fees, after deducting the old-for-new subsidy cash back, the down payment is only 1,800 yuan. “It’s equivalent to ‘zero down payment’.”
Considering the above discounts, the bare car price of a medium-configured Honda Accord has now dropped to the 100,000-110,000 yuan range.
In fact, this price is no longer a secret among short video platform bloggers. The video blogger “Buying a Car Buddy” said in a video in November this year, “The Accord luxury edition bare car only costs 110,000.” Wuhan Shengjie Auto, a dealer, also reduced the Accord bare car price to 110,000 yuan in their car-selling video.
In addition to the Accord, many models such as Haoyue, Xingge, Odyssey, and Avancier have also participated in the price reduction. “It’s not just the Accord, nothing is easy to sell now.” The aforementioned salesperson pointed to Haoyue, Odyssey… in the exhibition hall, all of these models were once the sales pillars of GAC Honda.
According to Auto Home data, in November of this year, Xingge sold 4,267 units, a decrease of 2,099 from the previous month; Haoyue was 13,266 units, and Odyssey was 2,468 units.
In the aforementioned Beijing 4S store, the bare car price of a 2025 two-wheel drive Haoyue is also less than 110,000 yuan.
The person revealed that there are still 180 units of this year’s sales task left unfinished in their store. If the sales target is achieved, the dealer can purchase from the factory at a preferential price, a policy that once prompted dealers across the country to “sell at a loss.”
The person said that their dealership sets the sales task for each salesperson at 10 to 15 cars per month according to the salesperson’s experience. Nowadays, it is almost an impossible task for a salesperson to sell 15 cars a month. “Now we have given up.”
“It’s too hard to sell Japanese cars now. It’s said that we will also move next year.” The person revealed, pointing to the not far GAC Toyota, “You see, Toyota has already moved, moved to a farther place.”
The joint venture enterprise that is most like a Japanese company
Sony’s former CEO Nobuyuki Idei wrote in his book “The Management of Life”: “Japan cannot get rid of the manufacturing myth, Japanese companies cannot integrate well with IT technology, and fall into the trap of innovation. Moreover, Japanese companies also have the big problem of bureaucracy dependence.”
“Among GAC Honda, Dongfeng Honda,GAC Toyota and other several Japanese joint ventures, GAC Honda is the one that is most like a Japanese company,” said Zhou Jiaqi (a pseudonym), who once worked at GAC Honda and was an early technical staff of GAC Honda. What he meant by “like a Japanese company” refers to many aspects such as welfare and management.
“This is related to the agreement at the time of the joint venture,” the person said.
“Even knowing that I will be their leader soon, when there is a technical dispute, GAC Honda’s technical staff will also be meticulous about some technical details, and even dare to ‘hard just’ their superiors.” This is Zhou Jiaqi’s initial impression of GAC Honda.
The person said that Honda’s joint venture brought advanced technology and management concepts at the time, which saved GAC, which was in danger at the end of last century, and GAC Honda has also sent a batch of talents to GAC Group. In his view, Honda’s historical mission in China can be said to have been completed.
However, the characteristics of this “joint venture enterprise that is most like a Japanese company” have also become a huge hindrance when facing transformation. Zhou Jiaqi said that due to the Japanese management only thinking about “eating the old book” and making money at the moment, they are unwilling to think about the future, which makes Honda slow to respond in the wave of new energy.
Honda, as a global brand, once won Chinese users with attributes such as fuel economy, driving control, and reliability. But with the rise of independent brands, the advantages of Japanese cars are no longer obvious.
Take GAC Honda’s Fit as an example, this car was once the representative of small cars, with high value preservation, fuel-saving and worry-free, very reliable, and it was the first choice for many young people to buy a car. But in the current situation where the penetration rate of new energy vehicles exceeds 50% and price wars are intensifying, the selling points of the Fit have disappeared.
Under the pressure of both volume and price decline, Honda has begun to close factories and lay off employees.
“Inside GAC Honda, people are now in a state of panic,” said a person close to GAC Honda. The so-called “panic” refers to the layoff news that has been circulating since the second half of the year.
In the second half of this year, Dongfeng Honda’s second production line in Wuhan and some production lines of GAC Honda’s Guangzhou factory have successively closed or announced that they will close, thereby reducing production capacity.
The news of reducing production capacity has been confirmed by GAC Honda. GAC Honda posted on its official microblog, confirming that it will close two production lines. GAC Honda stated that the company currently has four complete vehicle production lines with an annual production capacity of 770,000 units. Among them, the fourth production line is planned to be closed.
Honda has to bet on new energy.
Regarding the layout in the new energy field, GAC Honda described it as the “1113” strategy, which includes one new electric brand “Ye P”, and its first pure electric SUV Ye P7 is based on the Architecture W platform, which is expected to be launched in the first half of 2025.
In the second half of this year, Honda China also officially started production of its first global new energy factory, “Dongfeng Honda New Energy Factory.”
However, even so, the salespeople at GAC Honda’s 4S stores still “shake their heads” at the sales situation of their own pure electric cars.
At present, GAC Honda’s on-sale new energy models are Jipai 1 and Jipai 2. The aforementioned salesperson pointed to a Jipai in the exhibition hall and said helplessly, “This car only sold a few units throughout the year, so we moved it to the corner of the position.”
According to Auto Home data, in the past six months, Jipai 1 has a total sales volume of only 625 units, including only 11 units in November.
Can the merger save Japanese cars?
Not only in the Chinese market, looking at the global market, Japanese cars are facing a crisis.
Honda’s global sales exceeded 5.2 million in 2018, but only 4 million in 2023. Nissan is even worse, with global sales of 5.65 million in 2018 and only 3 million in 2023.
According to Caixun Society reports, in November this year, Nissan announced a global layoff of 9,000 people and a 20% reduction in production; in addition, an automotive industry person said that since last year, Honda has started asking suppliers in some regions to reduce prices by 30%, and this year it has asked for further price reductions, and many suppliers have chosen to exit.
From the data, the global production of Japan’s eight major car companies from April to September 2024 was 11.8783 million vehicles, a decrease of 6% year-on-year. This is the first time that Japan’s car production in the first half of the year has decreased since the 2020 epidemic. Among them, Toyota’s production decreased by 7% to 4.705 million vehicles; Honda decreased by 8.1% to 1.817 million vehicles, and Nissan decreased by 7.8% to 1.5325 million vehicles.
“Looking at both the Chinese market and the international market, Honda’s sales are showing a downward trend. This is mainly because Honda’s main models are fuel vehicles. Faced with the transformation of the automotive industry, the new energy vehicles produced by Japanese car companies are not only expensive but also not as good in performance as domestic new energy vehicles, so sales are sluggish,” said Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology.
The sales and supply ends are all conveying the chill, facing the crisis, Honda chooses to “huddle for warmth”.
However, can the merger make Honda and other Japanese car companies “come back to life”?
“The possibility of Honda and Nissan merging is quite large. Mergers and reorganizations are the development trend of global car companies,” Zhang Xiang said, “After the merger, the scale of the car companies will be larger, sales will be larger, technology can be shared, and the supply chain can be integrated. This will undoubtedly reduce costs.”
With the increase in scale, car companies can purchase uniformly to reduce purchase costs; they can develop uniformly to reduce the number of car platforms and reduce development costs. In addition, car companies can cut loss-making models, streamline the product line, reduce waste; merge all sales channels, and integrate the sales of different brands in the dealerships.
At the end of the last century, Hyundai and Kia merged and achieved such effects. Hyundai and Kia had many models before, competing with each other, and the product line was chaotic. After the merger, Hyundai and Kia cut a large number of redundant models, leaving only a few classic models, with the same power train and chassis, equipped with different appearances and interiors, and hung different brands for differentiated sales.
If Honda, Nissan, and Mitsubishi can merge smoothly, they may also achieve the same effects in the short term and improve performance. However, the long-term competitiveness of car companies still depends on the competitiveness of R&D efficiency and new models.
“Such a merger also has reference value for domestic car companies. There are too many domestic car companies now. Only by integrating can the scale be increased to avoid repetitive and low-level competition,” Zhang Xiang believes.
