Honda tells suppliers to cut costs in US$9 billion push to fend off China, documents show

Honda has instructed its suppliers to drastically reduce prices by more than US$9.4 billion over the next four years, according to internal company documents. The move, aimed at combating intensifying competition from China, will allow Japanese suppliers to better compete with Chinese rivals like BYD. Honda expects EV-related losses to total over US$12 billion, making it one of the biggest hits among global automakers.

The automaker's focus is shifting towards petrol-electric hybrids as it grapples with a struggling car business and the need to invest in advanced technology. Honda has briefed suppliers on the plan and urged them to source more components from Chinese suppliers, and review their procurement processes to use standardised parts.