Honda and GAC Extend Joint Venture to 2038

On July 20, Honda Motor China and Guangzhou Automobile Group (GAC) signed a strategic renewal agreement that extends the cooperation of their joint venture, Guangqi Honda Motor Co., Ltd., to 2038 while keeping the 50:50 share structure unchanged. The partnership, established in July 1998, has sold more than 11 million vehicles in China across sedans, SUVs, MPVs and emerging electric models.

The venture has faced a sharp sales decline, with first‑half‑2026 cumulative sales of 68,318 units, a 55.8% year‑on‑year drop, and June sales of 14,099 units, down 53.0%. Key models such as the Accord and UR‑V saw declines of over 56% and 62% respectively. Honda will treat 2026 as a “hibernation” year, tightening its product development process, cutting under‑performing projects and focusing on three new models slated for 2027 that will span gasoline, hybrid (including a fifth‑generation i‑MMD system) and pure‑electric or plug‑in hybrid platforms. The renewed agreement deepens collaboration on product definition, technology R&D and supply‑chain integration, aiming to revive competitiveness as China’s auto market pivots toward electrification and smart mobility.