Honda Motor Co. and GAC Group have agreed to extend the term of their GAC Honda joint venture through 2038, maintaining their existing ownership structure as the partnership adapts to changes in China’s automotive market.
Honda China announced the agreement on Monday, confirming that both companies will continue to hold equal 50% stakes in the venture.
Partnership Extended for Another Decade
Established in July 1998, GAC Honda was Honda’s first joint venture in China and is responsible for vehicle production and sales in the country.
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The company said the joint venture has sold more than 11 million vehicles since its establishment.
The renewal comes as the original 30-year cooperation agreement approaches its expiration.
Focus Shifts Toward New Energy Vehicles
Honda China said the two companies will combine their technological capabilities and resources to strengthen GAC Honda’s competitiveness while accelerating its transition toward new energy vehicles (NEVs).
The company noted that China’s automotive industry continues to undergo rapid changes driven by vehicle electrification and the development of intelligent vehicle technologies.
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Sales Decline Amid Market Competition
The announcement comes as GAC Honda continues to face declining sales.
According to Honda China, the joint venture sold 14,099 vehicles in June, a 53.03% decrease from the same month a year earlier.
Sales during the first six months of the year fell 55.82% year on year to 68,318 vehicles.
Vehicle production also declined, with June output totaling 5,201 units, down 83.22% from a year earlier. Production during the first half of the year fell 49.85% to 82,884 vehicles.
By comparison, GAC Group reported sales of 144,866 vehicles in June, down 3.47% year on year, while first-half sales increased 2.35% to 773,085 vehicles.
New Models Planned
GAC Honda previously announced plans to introduce three new models in 2027 covering gasoline-powered, hybrid and new energy vehicle segments.
The planned lineup includes a next-generation Accord, a model equipped with Honda’s fifth-generation i-MMD hybrid system, and a vehicle developed on a new China-focused NEV platform.
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