Honda is scaling down its full-time production workforce in China, with around 1,700 employees voluntarily agreeing to leave one of its JV vehicle manufacturing operations there.

GAC Honda Automobile, a joint venture between Honda and the Chinese state-owned automaker Guangzhou Automobile Group, reportedly told workers earlier this month it was seeking to make voluntary layoffs, reports say. The workers agreeing to leave reportedly account for around 15% of the GAC Honda workforce.

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Reports suggest GAC Honda has not set a final target for its latest voluntary redundancy programme, after confirming it made 900 redundancies at the end of last year as part of a cost-cutting drive – as it steps up its transition to zero-emission vehicles.

Japanese vehicle makers are struggling in China’s market amid intense price competition and a surge in sales of electrified vehicles from domestic makers.

Honda’s joint venture with GAC operates four factories in China.

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Global automakers generally have struggled to keep pace with the Chinese market’s rapid transition to battery electric vehicles (BEVs) in the last few years and have lost significant market share as a result.

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Honda said its sales in China fell by 10% to 1,234,181 units last year, split more or less evenly between its two main joint ventures – GAC Honda and Dongfeng Honda with 620,469 and 613,712 sales respectively. Combined production was also close to 1.2 million units.

Honda’s two China joint ventures have a combined production capacity of almost 1.5 million vehicles across seven plants. The two joint ventures are also scheduled to complete construction of two separate EV plants this year, each with a production capacity of 120,000 units, which would lift Honda’s total annual production capacity in the country to 1.73 million units.