Recently, Honda President and CEO, Toshihiro Mibe, reportedly admitted that Honda is currently in a very difficult position to match production efficiency in China. That said, what should you know about it?
According to Nikkei Asia, it all started after Mibe visited an automotive supplier factory in Shanghai in February 2026. He saw firsthand the operation of a fully automated factory with no workers on the production floor, a facility that supplies components to Tesla and other Chinese EV brands.
A stark difference between the Chinese and the Japanese
Astounded by the speed and level of automation, Mibe reportedly said: “We have no chance against this thing.” Mibe's fears are not without reason. Statistics show that Honda is currently struggling in the Chinese market, with sales declining for five consecutive years.
From peak sales of 1.62 million units in 2020, the figure plummeted to just 640,000 units in 2025, and is expected to continue to decline below 600000 units this year. Worse, Honda was forced to cancel several large EV projects involving estimated losses of up to USD15.8 billion (approximately RM70 billion) due to its failure to compete with low prices and fast technology from brands such as BYD and Nio.
Moreover, realising that the slow bureaucracy at headquarters was the main reason they were lagging behind, Honda announced massive reforms starting April 1, 2026. Thousands of engineers are now being reassigned to independent Honda R&D units to allow them to innovate faster without the restrictions of upper management.
Furthermore, many automotive analysts see this move as an admission that Honda (and other Japanese brands) are lagging behind in terms of development speed and costs compared to the Chinese supply chain.
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