On November 3, Honda China announced its October terminal car sales. Data show that in October 2021, Honda’s terminal vehicle sales in China was 148,377 units, a year-on-year decrease of 17.87% compared with 180,655 units in the same period last year. Honda pointed out that the decline in sales was mainly due to the tight supply of parts and components, with the “lack of cores” being the first to bear the brunt.

Sales have been declining since April and recovered in September


Since the beginning of this year, the shortage of chips has disrupted the layout of many car brands. Many car companies have had to reduce production or distribution, Honda Motor is also deeply troubled, since this year, news of the suspension of production in Japan has been constantly exposed. Honda's China region has also been affected. Since April this year, the overall sales in China have been declining. Among them, the sales volume of Dongfeng Honda Civic was less than 5,000 during the lowest sales period, while in the same period in previous years, the sales of the Civic were above 25,000.


But the good news is that since September, Honda’s core shortage problem has been alleviated, and Civic sales have returned to around 20,000 vehicles. Honda's overall sales in China have also picked up. October terminal sales increased by 22.17% from the previous month, creating the best sales performance after March and April.


Judging from the overall sales data from January to October, the cumulative sales of Honda's terminal vehicles in China from January to October were 1,256,192 units, a slight increase of 0.8% year-on-year.


The cumulative gap between Guangben and Dongben is 20,000 vehicles, hybrids become a bright spot


In terms of different brands, data show that the sales of Honda's two joint ventures in China have fallen sharply in October.


Guangqi Honda’s October terminal sales were 77,748 units, a 9.09% year-on-year decrease of 85,520 units in 2020; cumulative terminal sales from January to October were 618,140 units, a year-on-year decrease of 0.71%. Dongfeng Honda’s October terminal sales were 70,629 units, a drop of 25.76% year-on-year from 95,135 units in 2020; cumulative terminal sales from January to October were 638,052 units, an increase of 2.21% year-on-year, which has achieved cumulative positive growth.


In comparison, the cumulative sales volume of the two joint ventures differs by 20,000 vehicles, which is not significant. In order to increase sales and quickly respond to market demand, Guangben and Dongben have accelerated their new efforts: On November 1, Guangqi Honda's new compact sedan, INTEGRA, debuted for the first time. The new car is named "Xingge" in Chinese and is called Dongfeng Honda Civic. The pre-sale price of the sister model starts at 143,000 yuan. Not long ago, the INSPIRE, which was redesigned in the mid-term of Dongfeng Honda, rolled off the assembly line and was renamed "Inspiration". However, with the advancement of Honda's dual-vehicle strategy, the differentiation between the two brands is shrinking, and the trend toward homogeneity makes the two brands inevitably have the risk of internal loss.


In addition, accelerating the electrification transformation is also becoming an important strategic move for Honda China to enhance its business. Data shows that from January to October this year, the total sales of models equipped with SPORT HYBRID (sharp and hybrid) high-efficiency dual-motor hybrid power system reached 190,779, an increase of 26.2% over the same period. Since the beginning of this year, hybrid vehicles have become one of the focus of car companies. Brands such as Great Wall, Chery, BYD, Geely, and Changan have successively released hybrid strategies. It can be seen that hybrid models will still be one of the important driving forces for Honda's growth in China in the later period.


Not only that, Honda Sync is also planning to increase the introduction of pure electric models. On the evening of October 29th, GAC Group announced the review and approval of the "Proposal on the Change of the Construction Project for Expanding the Production Capacity of Guangqi Honda's New Energy Vehicles". Introduce higher-level Honda's latest "e:N" series pure electric models.


Overall, Honda's sales in China in 2021 will not be small. Although there are some bright spots and recovery, there are only two months left before the end of the year, and it is difficult to achieve a substantial increase.