GAC Honda to revive fortunes through China-driven transformation

Sino-Japanese joint venture GAC Honda is moving into a new stage of development, focusing on a deeper transformation aimed at rebuilding competitiveness in China's rapidly changing automotive market.

The joint venture said on Sunday its future strategy will center on becoming a company that not only operates in China but also develops products based on Chinese consumers' needs, leveraging local technologies, supply chains and market experience.

The statement came within days of GAC and Honda extending their partnership through 2038.

For decades, multinational automakers in China have relied largely on a model of introducing global products and adapting them to local preferences.

However, with Chinese consumers embracing electrification, intelligent driving and digital services at an unprecedented pace, traditional localization approaches are facing new challenges.

GAC Honda said it is now shifting from "global models adapted for China" to "China-defined products", allowing local teams to play a greater role in vehicle development.

"Those who live and drive in China every day should define the vehicles Chinese consumers use every day," the company said.

One of the biggest changes will take place in research and development.

GAC Honda plans to introduce a "product director system" under which teams from the joint venture will lead product definition and coordinate resources from both shareholders.

The approach means Chinese teams will have a stronger voice in deciding vehicle design, functions, intelligent features and user experience based on local driving scenarios.

For existing global models, GAC Honda said it will also increase China-specific development efforts. Hybrid models, for example, will receive comprehensive upgrades, including improved handling, reduced vehicle weight and higher fuel efficiency.

In the next two years, the company plans to launch five new vehicles, including upgraded global models and two new energy vehicles developed through deeper cooperation between Honda and GAC.

The move reflects a broader shift within Honda's global strategy, as the Japanese automaker seeks to leverage China's advantages in electric vehicles, intelligent technologies and supply chain efficiency.

China has become one of the world's most competitive markets for smart EV development, with domestic automakers accelerating product cycles and technology adoption. GAC Honda believes integrating these capabilities will be critical for future growth.

Beyond products, GAC Honda is also reshaping its supply chain strategy.

The company said it will deepen cooperation with domestic suppliers, increase local procurement and promote platform-based development and component sharing.

The company said it will continue applying its established quality management system to supplier cooperation, ensuring safety and reliability throughout the production process.

The transformation also extends to sales and customer service.

China's vast geographic diversity means consumer expectations vary significantly between major cities and lower-tier markets.

GAC Honda said a more flexible retail network will be needed to reach different groups of customers.

In mature urban markets, the company plans to introduce lighter and more efficient dealership models to improve customer experience.

Meanwhile, in smaller cities and county-level markets, it will expand service coverage through diversified retail formats, including cooperation with GAC's integrated sales service network.

Internally, GAC Honda is also carrying out organizational reforms.

The company said it will streamline decision-making processes, develop more digital and intelligent talent, optimize production capacity and focus resources on more efficient factories.