(Yicai) July 26 -- GAC Honda Automobile, Honda Motor's Chinese joint venture with Guangzhou Automobile Group, plans to close a production line with an output of 50,000 units in China while putting a new energy vehicle line into operation.

One production line will be shut down in October, while a new NEV one will become operational in November, GAC Honda told Yicai today.

According to a report by Nikkei, Honda announced yesterday that it will shut down or halt production at two of its seven gasoline car factories in China and set up two new electric vehicle plants. Its factory in Guangzhou will stop operations in October and in Wuhan in November, retaining parts production and research facilities.

Honda will reduce its annual vehicle production capacity in China from 1.49 million units to 1.2 million units by closing factories and other measures, the report showed. The cut accounts for roughly 10 percent of the Tokyo-based carmaker's global output.

Japanese cars are experiencing a slump in China, and Honda's production cuts will set a record for the largest scale among its domestic peers.

China, the world's largest auto market, remains an important one for Japanese carmakers, Honda noted. The firm plans to build two new EV factories in China and put them into operation later this year, likely recovering its production capacity to 1.44 million units.

As the competitiveness of independent new energy brands continues to improve, the market share of Japanese JV brands in China is gradually shrinking.

Japanese car sales in China fell 12.4 percent to about 1.5 million units in the six months ended June 30 from a year earlier, according to data from the China Passenger Car Association. Honda China figures showed that its sales plunged 22 percent to 416,000 units.

Editor: Martin Kadiev