Honda to adjust China production plan after strike loss

Shanghai, June 9 (Gasgoo.com) Despite the fact that all Honda Motor's factories in China have gradually gone back to normal since last Thursday, the strike has caused the automaker loss of nearly 3 billion yuan ($439 million) in sales and Honda now has to adjust the production plan for China, media reported lately.

Honda has previously planned to raise its output and sales in China this year to about 630,000 units, of which Guangzhou Honda and Dongfeng Honda account for 386,000 units and 240,000 units respectively. However, industry insiders estimate that the ten-day-strike at a parts plant has reduced output of at least 15,000-18,000 units at car factories of both the joint ventures.

Moreover, analysts say that the dispute at the parts plant has a worse effect on the Guangzhou Honda than on the Dongfeng Honda. Revenue of Denway Motors (Guangzhou Honda Automobile listed company) is expected to experience a loss of 50% and that of Dongfeng Motor is estimated to come to 17%.

Honda mainly sells mid- and high-end passenger vehicles in China. Therefore, sales of Honda are expected to decrease 2.25-2.7 billion yuan if each vehicle sells for 150,000 yuan.

Besides, the Honda parts plant has a daily loss of about 40 million yuan, hence, loss of business at Honda's four assembly plants and one parts plant have so far caused the automakers loss of about 3 billion yuan. 

In addition, the walkout has forced Honda to raise prices of its all models in China. Currently, Dongfeng Honda CRV, Guangzhou Honda Odyssey and City are in tight supply, which is likely to be eased in the middle or late June, Honda dealers said.