Honda Motor has announced a fresh round of temporary production shutdowns at factories in Japan and China, as the global automotive industry continues to grapple with severe semiconductor shortages.
Production Halts Across Key Markets
The Japanese automaker confirmed that operations at several of its domestic plants in Japan will be suspended on 5 and 6 January. Meanwhile, in China, all three factories operated by its joint venture, Guangqi Honda Automobile, will be taken offline for a five-day period from 29 December to 2 January.
This move represents a setback for the company, which had previously signalled that production was expected to normalise from late November. The latest stoppages underline that supply chain bottlenecks remain unresolved. When Japanese production resumes on 7 January, output will be scaled back for an additional three days from originally planned levels.
Geopolitical Dispute Exacerbates Supply Strain
The broader chip shortage has been intensified by a geopolitical dispute. Chinese authorities blocked Nexperia, a semiconductor manufacturer owned by China-based Wingtech Technology, from exporting chips made at its local facilities.
Nexperia supplies crucial components used in vehicle control systems, including basic functions like power windows and windscreen wipers. This action disrupted supplies to North America, leading to slowdowns in the United States and Canada, and follows a temporary halt at Honda plants in Mexico during October and November.
Financial Impact and Revised Forecasts
The persistent disruption has forced Honda to slash its financial outlook. The company has cut its global sales forecast to 3.34 million vehicles for the year, down from an earlier estimate of 3.62 million.
In its financial outlook for the year ending March 2026, Honda warned that reduced output linked to the chip shortages would cut operating profit by approximately ¥150bn (£770m), cautioning that the impact could be even larger. Following reports of the latest shutdowns, Honda shares fell 1.5 per cent in Tokyo trading.
These developments highlight the continuing vulnerability of global manufacturing to concentrated supply chain shocks, with the automotive sector remaining particularly exposed to fluctuations in semiconductor availability.
