Japanese traditional car company Honda announced on Thursday that it plans to close a factory in China this year and suspend car production at another factory.

According to a spokesperson for Honda, the company will close a factory jointly operated with GAC Group in October. The factory was built nearly 20 years ago and now mainly produces Honda's Accord sedan models, with an annual production capacity of around 5,0000 vehicles.

In addition, the spokesperson stated that Honda will suspend production at another joint venture with Dongfeng Motor Group in China from November, which has an annual production capacity of 240,000 vehicles.

A Honda spokesperson responded by stating that this move aims to "accelerate the steady transition to electric vehicles and optimize production capacity to achieve sustainable growth in our automotive business in China. And pointed out that the company is facing a severe market environment in China, the world's largest automotive market.

The spokesperson also revealed that the Guangzhou Honda factory that produces Accord plug-in hybrid vehicles will be converted into warehouses and other uses.

It is reported that the shutdown of the two factories mentioned above has resulted in Honda's annual production capacity in China being reduced from 1.49 million vehicles to 1.2 million vehicles.

The scale of Honda's production reduction this time is the largest among Japanese automakers in the past few years. This highlights the severe challenges faced by traditional Japanese car companies in the rise of electric vehicles in China.

Moreover, based on the current news that has emerged, the potential scope of impact may be even greater.

On the day Honda announced the closure of its factories and production stoppage, there were also reports that due to intensified competition in the Chinese automotive market, Honda planned to close three of its seven production lines in China, directly reducing its fuel car production capacity by one-third, from 1.49 million to 1 million vehicles.

According to reports, Honda is in talks with its joint venture partners Guangzhou Automobile Group and Dongfeng Motor Group to reduce production, and is expected to announce this news later this year.

However, although Honda continues to reduce its fuel car production capacity in China, it does not mean that the company wants to give up the Chinese market. On the contrary, Honda is planning to increase investment to improve the production capacity of electric vehicles in China.

It is reported that Honda hopes to restore its production in China to about 1.44 million vehicles through two electric vehicle factories jointly built with Guangzhou Automobile Group and Dongfeng Group. These two new factories are expected to start production later this year.