Acura Is The Latest Automaker To Leave China After Honda-GAC Venture Concludes

Jan. 10, 2023 8:23 AM ET by Jay Traugott Industry News / 2 Comments

After-sales services to Acura owners will still continue.

Chinese automaker Guangzhou Automobile Group (GAC) has confirmed its joint venture with Honda to build Acura luxury vehicles for the local market has officially ended production. The news was confirmed by Reuters but we knew this was coming since last April.

At the time, Honda announced plans to reallocate resources to support its new e:NP lineup of EVs instead of trying to make a dent in the highly competitive Chinese luxury market. Acura owners in China, however, should not be concerned by this news as GAC has made clear it will continue to provide them with after-sales services at its joint venture's dealer network. The two automaker's joint venture will continue to manufacture other Honda brands.

Acura opened up shop in China only in 2016. Over the course of six years, it managed to sell just 6,554 vehicles in 2021 (a 45% drop from 2020), such as the China-only CDX and the RDX. The former shares a platform with the previous generation Honda HR-V. This is not the first time a foreign automaker has decided to exit not just China but also its joint venture with GAC.

Last August, Jeep announced it's also exiting China and its 12-year partnership with GAC. Reportedly, the problem was not just sales-related but rather increasing political concerns. GAC is state-owned and Stellantis, Jeep's parent company, was worried about Chinese government interference as well as ongoing economic tensions with the United States. Stellantis ultimately filed for bankruptcy for its GAC-Jeep venture.

Chinese Jeep dealerships did not take the news well. Last month, 26 dealers decided to sue Stellantis for about $130 million as a result of forced layoffs and other financial losses. That litigation appears to remain ongoing. Honda and Stellantis' decisions regarding not just GAC but also China, in general, could potentially pave the path for other Western automakers to do the same if the political and economic situations worsen.

China, unlike the US, requires these foreign OEMs to sign joint venture agreements with domestic automakers. This often results in government interference, something foreign carmakers are not accustomed to.