(Yicai) Sept. 10 -- Japanese auto manufacturer Honda Motor’s joint venture with China’s Dongfeng Motor is cutting jobs to improve operating efficiency and speed up its transformation to new energy vehicles, the firm told Yicai today, confirming media reports that it is about to implement large-scale lay offs.

Dongfeng Honda Automobile is reducing its headcount, Nikkei reported yesterday.

The job cuts are expected to affect around 2,000 employees, according to previous reports.

Most of the layoffs are in the manufacturing section, the Wuhan-based JV told Yicai. Many staff applied for voluntary redundancy and were given reasonable compensation. Judging from the feedback, the majority of the employees were satisfied with the arrangements.

JV carmakers are slow to keep up with the transition to electric cars. The increased penetration of new energy vehicles and the strong sales of their Chinese rivals are eating into their market share. As a result, the JVs are resorting to slashing their headcounts and overhauling their organizational structures to better position themselves for the transition to NEVs.

China's NEV penetration rate reached 54 percent last month, a jump of 16.7 percentage points year on year, according to data from the China Passenger Car Association. And sales of Chinese marques surged 11.4 percent to 63.4 percent.

Dongfeng Honda, which already has three NEV models on the market, plans to roll out more than 10 all-electric models by 2030. It recently put its new EV plant into operation.

Dongfeng Honda’s sales plunged 74 percent in July from the same period last year to 14,229 autos, according to the latest data. Sales in the first seven months slumped 10.5 percent to 252,112 units.

Editor: Kim Taylor