Author | Chai Xuchen Editor | Zhou Zhiyu Faced with the trend of new energy electrification and the loss of market share under price wars, joint venture car companies have been "Renovating" their famous cars in an attempt to mount a strong counterattack. On May 30, SAIC Volkswagen's Touareg L Pro was launched. The car, which is said to be "the smartest gasoline car", had been preheated for nearly two months prior to its launch. The launch invited representatives from DJI Car and Tencent Travel, as well as the person in charge of iFLYTEK, all of whom attended in person to demonstrate the strength of its smart driving and smart cabin. As a "meritorious model" of SAIC Volkswagen, Touareg has been synonymous with Volkswagen SUVs for the past 15 years and was once the best-selling joint venture SUV. With a monthly sales volume of nearly 20,000 units for a long time, it occupies a 20% share of SAIC Volkswagen. SAIC Volkswagen hopes that the new Touareg will become a disruptor in the current market, from gasoline car intelligence to a stable price system with value-added buyback policy. In the view of Yu Jingmin, Vice President of Sales and Marketing of SAIC Volkswagen, new energy vehicles still have range anxiety and gasoline cars have an advantage that needs no explanation, but the biggest difference between them and electric vehicles lies mainly in their appearance and intelligence. After fulfilling the core needs of contemporary consumers, this once "famous car" seems to be reborn. Thus, from DJI's advanced intelligent driving solution to iFLYTEK's smart cabin voice assistant, this 200,000 yuan-level SUV brings together the strengths of various parties, aiming to break through the industry's perception that gasoline cars are less intelligent than electric vehicles. The launch of the new Touareg marks the beginning of SAIC Volkswagen's counterattack. In a post-event interview, Yu Jingmin mentioned several times that due to external cooperation and the accumulation of joint venture partners, SAIC Volkswagen's technology center is actually ahead of many independent brands, but unfortunately the rhythm is too slow. The company will now accelerate its efforts to catch up and even surpass in electric, hybrid or gasoline cars. Yu Jingmin revealed to Wall Street News that the new Touareg is the first gasoline car product in the Pro series, which is focused on intelligence, and that the Passat and Touareg Pro versions will also be introduced within the year. While polishing its technology, it is also preparing for the intelligence of its A-class cars. A counteroffensive war ignited by a gasoline fueled chariot seems to be brewing rapidly. But to be fair, SAIC Volkswagen's intelligence still lags far behind new forces such as Huawei, Xiaopeng, and Ideal. At the same time, in the current context where BBA is crazy about price cuts and the BMW electric car at over 180,000 yuan is setting a new industry low price, the 236,800 yuan Touareg L Pro seems somewhat out of step and the counterattack is difficult to achieve. In response to the challenge, SAIC Volkswagen has given a three-year 20% discount buyback plan. Users no longer need to worry about the fluctuation of vehicle purchase costs and second-hand car prices. SAIC Volkswagen locks in the difference between the purchase and final selling prices of users' vehicles, in a move to crack the price war. This also buys precious time for SAIC Volkswagen to speed up product and intelligence catch-up. This is the backdrop of the efforts to win back the former "king" of the Chinese car market.

In today's weather is good. Today's weather is good.

Faced with pressure from the Chinese auto market, Honda, the Japanese auto giant, is no longer making small repairs, but is instead resorting to the 'last ditch effort'.

On July 25th local time, Honda announced that it will close and stop production at its two gasoline car factories in China and free up more resources to focus on electric cars. One is the Guangqi, Honda's 0.05 million-capacity plant, which will close in October. In November, the other, Dongfeng Honda's 0.24 million-capacity factory, will also halt production.

Honda's total capacity for gasoline vehicles in China will be reduced from 1.49 million to 1.2 million units. This is Honda's first production cut since it invested in the Chinese market in 1990, and the largest scale reduction by a Japanese automaker to date.

A Honda spokesperson said the adjustments were part of Honda's response to changes in the Chinese market.

This is due to its declining market share in China. Honda currently has a gasoline car capacity of 1.49 million in China, with Honda's South and North factories accounting for 0.72 million and 0.77 million, respectively. But since the sales peak of 1.627 million in 2020, Honda's sales in China have seen three consecutive declines, shrinking to 1.2342 million units last year.

In the first half of this year, Honda's sales in China fell by 21.5% to 0.416 million units. With no signs of a turnaround, Honda will also reduce its sales plan in China by 13% to 1.06 million units, which means that more than 400,000 units of production capacity will be idle.

In fact, Honda, which had already made a judgment on the market situation, had quietly launched a 'slimming' plan before this.

In December last year, Honda announced that it would cut around 900 contract workers at Guangqi Honda, accounting for 7% of its total staff, in order to quickly shift to the electric car market. In May of this year, Guangqi Honda offered compensation of a high standard of 'N+2+1.8', which enabled thousands of employees to leave voluntarily.

As one of the earliest Japanese automakers to enter China, and with seven localized factories established, Honda's current situation is undoubtedly lamentable. Industry insiders believe that the main reason for its 'retreat' is the difficult sale of gasoline cars and the lackluster electric car market.

Under the impact of new energy self-owned brands, the product strength of Honda's two joint venture car companies in China has been significantly inadequate, with star models that were once sold on the core selling points of fuel economy, durability, and stability, such as Accord, CRV, Fit, and Civic, all experiencing rapid sales declines, and even discounts have been unable to return to their previous peaks.

In June this year, Honda's highest-selling model in China was the Honda CR-V, with monthly sales of 0.0166 million units; the Accord followed closely behind with sales of 0.012 million units. Both of them have fallen behind the glory of selling more than 0.03 million units a month in the past, and other models have also fallen below the '10 thousand unit line' one after another.

Gasoline vehicle sales pressure and Honda's new energy vehicles have not been able to shoulder the banner of sales. Within this year, Honda CR-V, Accord, and the hybrid versions of XRV have failed to sell more than a thousand units per month, while new pure electric models such as e:NS1/e:NP1/e:NP2 have been hovering in the hundred-unit range.

In fact, Honda's performance is a microcosm of the survival status of many Japanese joint venture car companies in China.

At the height of their performance, Japanese carmakers once 'rolled over' self-owned brands, capturing 22.6% of the domestic market in 2021. But as of the first half of this year, that number had shrunk to 14.9%.

The time when Japanese automakers were guaranteed to sell cars has long gone, and in recent years, 'closure, suspension, merger, and transformation' have been constant. Mitsubishi Motors has already announced its withdrawal from China, and Nissan also announced in June that it would close a factory in Changzhou, Jiangsu Province.

To cope with the challenges in the Chinese market, Japanese automakers must accelerate their transformation.

For Honda, closing the two factories is a specific measure to actively carry out industrial structural adjustments and invest more chips in electric cars, striving to maintain its market share in China. Honda also emphasized this time that 'as the world's largest auto market, China is still an important site for Honda'.

To this end, Honda plans to compensate for the current reduction in production capacity by building two new electric car factories under Dongfeng and Guangqi Honda. The goal is to start production by the end of this year and restore Honda's total production in China to 1.44 million units.

At the same time, Honda is rolling out a new electric vehicle lineup. In April of this year, Honda officially launched its new electric vehicle brand 'Li Nian' in China, with the most significant change being that China takes the lead in it.

The official information shows that Li Nian's first concept car, the 'Li Nian GT Concept,' was designed by a Chinese team and will be equipped with power batteries from Contemporary Amperex Technology, Huawei's smart cockpit, and iFlytek's voice control system, among others. This is also the focus of Honda's publicity this time.

The Chinese team has more say and has become the main theme of many current joint venture automakers; the participation of more domestic suppliers has also made traditional car companies catch up in the field of intelligence.

According to the plan, the "Ye" brand will invest in solid-state battery vehicles by 2025 and will launch six models by 2027. Finally, Honda will achieve 100% electrification in the Chinese market by 2035.

Next, Honda needs to make a last-ditch effort in the Chinese market.

For Honda and other joint venture automakers, "streamlining" is only a temporary expedient. Perhaps relying on the advantages of the Chinese market and supply chain to quickly complete the transformation is the best solution to achieve true revival in the Chinese market.