On December 17, 2025, Honda announced that due to a semiconductor chip shortage, its factories in China and Japan would suspend or reduce the production of complete vehicles from late December to early January next year. Specifically, the joint venture factory between Honda and GAC Group will suspend production for five days starting from December 29. In Japan, some factories will suspend production for two days on January 5 and 6 next year, and the output from January 7 to 9 will also be lower than originally planned. Although Honda did not specify which Japanese factories were affected, it is speculated in the industry that Saitama Works and Suzuka Works may be included in the adjustment.

This suspension and reduction in production is not the first time Honda has adjusted its production plan due to a chip shortage. In October and November 2025, Honda had suspended production at its Mexico factory and reduced output at its factories in the United States and Canada. The reduction in these factories was due to export restrictions on Nexperia, a Chinese semiconductor company, which led to restricted supply of parts. Although the North American factories have resumed production, their production systems remain unstable and are still at risk of chip supply shortages.

Financial Impact and Future Outlook

The automotive chip shortage has had a significant impact on Honda's financial situation. Honda's consolidated financial forecast for the fiscal year ending in March 2026, announced in November, shows that due to the semiconductor shortage leading to lower-than-expected production, its operating profit will be reduced by 150 billion yen (about 6.8 billion yuan). This loss highlights the huge impact of global chip supply chain disruptions on automakers.

Honda said that future production plans will be flexibly adjusted according to the supply of semiconductors. However, the ongoing chip shortage issue means that Honda's production worldwide faces uncertainty. This reduction in production not only affects Honda's factories in China and Japan but may also further impact its global supply chain and market performance.

Challenges in the Automotive Industry

Honda's suspension and reduction in production is a microcosm of the chip shortage dilemma faced by the global automotive industry. In recent years, the importance of semiconductor chips in global car production has become increasingly prominent, and chip shortages have become a major bottleneck restricting the development of the automotive industry. From Mexico to North America, and now to China and Japan, Honda's production adjustments reflect the profound impact of chip supply chain disruptions on automakers.

The root of this chip shortage problem lies in the fragility of the global semiconductor supply chain. As the automotive industry transitions towards intelligence and electrification, the demand for chips is increasing. However, insufficient chip production capacity and supply chain disruptions have put immense production pressure on automakers.

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