BUSINESS

Honda, GAC Renew China Venture Through 2038 Amid Sales Decline

Published: Jul. 21, 2026 4:41 a.m. GMT+8

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Founded in July 1998, the venture with GAC was Honda’s first vehicle manufacturing operation in China. Photo: VCG

Honda Motor Co. and Guangzhou Automobile Group (GAC) extended their auto joint-venture agreement by 10 years to 2038, preserving their 50-50 ownership structure.

The early renewal highlights Honda’s determination to defend its position in China, the world’s largest auto market, where foreign legacy brands are losing share to fast-moving domestic electric-vehicle makers.

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Honda and GAC renewed their joint venture to 2038, two years early, keeping 50-50 ownership.
Sales in China fell from 1.6 million in 2020 to 645,000 in 2025; Honda posted its first annual loss of ¥423.9 billion.
The venture plans to launch three models in 2027 and develop China-specific vehicles.

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Who’s Who

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What Happened When

July 1998：: GAC Honda was founded as Honda's first vehicle manufacturing operation in China.

2020：: Honda's China sales peaked at 1.6 million vehicles.

Late 2024：: Honda completed new factories for GAC Honda and Dongfeng Honda, each with annual capacity of 120,000 new-energy vehicles.

2025：: Honda's China sales fell to 645,000 vehicles.

Late 2025：: GAC and Honda increased the venture's registered capital to 8.7 billion yuan ($1.3 billion) from 5.4 billion yuan. GAC Honda also assumed full control of Dongfeng Honda Engine Co.

First five months of 2026：: Honda's deliveries in China dropped more than 30% from a year earlier to 173,000 vehicles.

Fiscal year ended March 31, 2026：: Honda posted a loss of 423.9 billion yen ($2.6 billion), its first annual loss since listing.

July 21, 2026：: Honda and GAC announced the early renewal of their joint-venture agreement by 10 years to 2038, preserving the 50-50 ownership structure. The original agreement was due to expire in 2028.

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