Honda extends joint venture with GAC in China to 2038 despite 60% sales drop

Honda announced that its joint venture with Guangzhou Automobile Group (GAC) will be extended until 2038, keeping the GAC Honda partnership operating in China. The extension comes as Honda’s sales in the Chinese market have slumped roughly 60 % over the past five years, falling from about 1.62 million units in 2020 to around 640 000 in 2025.

The collaboration, begun in 1999, has produced more than 11 million vehicles in China. Under the renewed agreement the equity structure remains unchanged and the companies will combine Honda’s R&D and GAC’s local resources to accelerate electric‑vehicle development, including the Ye series launched in 2024 and new models slated for 2027. Honda also plans to integrate smart‑cockpit technology such as Huawei’s HarmonyOS and advanced driver‑assist systems.

A Honda spokesperson said, “Although business continuity requires a certain timeframe, the Chinese automotive market is changing very rapidly. We made this decision to evaluate the business environment,” underscoring the strategy to remain in China’s pivotal market amid growing competition from domestic EV makers.