Honda’s sales slump in China casts doubts over group’s full-year target

Honda posted a 23 per cent slump in July China vehicle sales, its biggest decline in 17 months, casting doubts over the company’s full-year sales target in the world’s biggest auto market.

Honda had said it aims to increase China sales by 18.9 per cent this year, but during the first seven months, sales only grew 6.9 per cent.

A Honda spokeswoman attributed the decline to tough competition, and a seasonal decline in demand, among other factors, but said sales were expected to rebound in the second half of the year after the company launched new models.

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Honda is expected to launch around September a small utility vehicle and a cross-over utility version of the Honda Fit, to take advantage of these vehicles’ popularity in China.

Rival automaker Toyota also saw China sales fall 1.1 per cent in July and 7.6 per cent from a year earlier. Toyota sales have been weak because it is still ramping up production of the newly redesigned Corolla model, which went on sale in China recently, company officials said.

Honda and its two local joint ventures sold 39,543 automobiles in China in July, down 22.7 per cent from the same month a year ago and also lower than the 15.8 per cent year-on-year increase in June

The July decline is the biggest monthly fall since February 2013, when Japanese carmakers were still suffering from a wave of anti-Japanese sentiment in China triggered by a territorial dispute between Beijing and Tokyo.

Honda’s China sales in the first seven months of the year came to 392,959 vehicles.