Dongfeng Honda Automobile recently announced its business plan for the new year. The automaker plans to launch several hybrid and plug-in hybrid EVs in 2023, accelerating the transition to electrified cars. The goal is to increase the proportion of EVs in its portfolio to 50% by 2025.
Dongfeng Honda is a 50:50 joint venture between China-based Dongfeng Motor and Japanese Honda Motor. The company, headquartered in Wuhan, has 20 years of history in China.
At a media event on February 13, Dongfeng Honda reiterated the strategy of Honda Automobile (China) to stop introducing new internal combustion engine vehicles to the China market after 2030. Instead, Honda will put effort into raising the percentage of battery and fuel cell EVs to 40% in 2030, 80% in 2025 and 100% in 2040.
According to NetEase, Dongfeng Honda said it will launch two e:HEV and two e:PHEV-branded models based on the fourth-generation i-MMD hybrid technology in 2023. It also aims to bring the new generation or facelift of the existing SUVs and flagship sedans to the market.
The company said it will set up a new brand this year. Moreover, it has tasked itself to electrify half of its portfolio by 2025. To reach the goal, Dongfeng Honda said it will speed up BEV adoption and launch more hybrid products quickly. It introduced seven new gasoline cars and EVs last year.
China's EV penetration rate rose to 27.4% in 2022. However, homegrown EV makers have challenged leading automotive joint ventures in the wave of electrification.
Besides Dongfeng Honda, the Japan-based carmaker established another joint venture, Guangqi Honda Automobile, with GAC Motor in China. According to Honda, it manufactured more than 1.4 million cars in China last year, a 90.2% growth from 2021.
However, due to the COVID-19 pandemic and car parts shortages, Honda's sales in China decreased by 12.1% to 1.37 million cars. Sales of HEV, PHEV and BEV surpassed 231,000 vehicles.
According to Honda's latest financial results released last week, its sales revenue for the automotive business reached JPY7,723.5 billion (US$58.1 billion) from April to December 2022. The number grew 15.8% from 2021 primarily because of the favorable currency effects.
The operating profit for the automotive business was JPY112.9 billion from April to December 2022, declining 40.1% year-over-year. Honda said it was due to higher material costs, inflation and decreased unit sales.