Honda reportedly is cutting jobs as it suspended production at three Chinese plants.

Citing local media reports, Bloomberg said the automaker offered redundancy packages to 2,000 workers at its joint venture with Chinese state owned Dongfeng Motor. The staff optimisation was part of a strategy to ensure sustainable operations and speed up its transition to electric vehicles, Dongfeng Honda reportedly said in a statement on social media.

Production at three plants had been suspended for about two weeks from Aug 26 to reduce inventory, Honda told Bloomberg in an emailed statement.

But the automaker declined to comment further on the job cuts and Dongfeng didn’t immediately respond to Bloomberg requests for comment.

Honda’s China sales plummeted 21.48% in the first half of 2024, the report noted, adding the automaker slashed the number of workers at another joint venture with Guangzhou Automobile earlier this year.

Retail sales of passenger vehicles in China continued to decline in August 2024, by 1% to 1.92m units, the fifth consecutive month of decline according to the China Passenger Vehicle Association (CPCA), Just Auto reported today.

Sales of new energy vehicles (NEVs) rose 43% to 1m units last month, or 53% of total sales, while sales of internal combustion engine (ICE) models continued to decline sharply.