Honda CEO tours a Chinese auto factory and says 'we have no chance against this'

Honda CEO Toshihiro Mibe recently walked into a Chinese car factory and walked out with a brutally honest conclusion: the competition has leveled up.

During his visit to a highly automated supplier facility in Shanghai, the Honda boss saw car production lines with virtually no human workers.

While he was there, the efficiency, speed, and cost advantages on display were impossible to ignore.

After declaring that ‘we have no chance against this,’ Mibe and Honda are now being forced into a major rethink.

The Honda CEO is making moves to keep the company competitive

At the heart of that rethink is the revival of Honda R&D, a once-independent engineering arm first spun off in 1960 by founder Soichiro Honda.

The idea was simple: give engineers freedom, and innovation will follow.

That philosophy paid off with breakthroughs like the CVCC engine, which helped the Honda Civic meet strict US emissions standards in the 1970s.

Honda moved away from that model in 2020, folding R&D back into the main company to improve efficiency.

Honda CEO Toshihiro Mibe, who was the head of R&D at the time, supported the move.

“Bold reforms were necessary for survival,” he said.

Now, just a few years later, the company is reversing course.

Thousands of engineers are being reassigned to a newly independent R&D unit in hopes of restoring creativity and speeding up development in a very different global landscape.

Chinese carmakers are the biggest competitors for Honda

That landscape is increasingly dominated by China.

Automakers there can bring new models to market in just 18 to 24 months, which is roughly half the time it takes many traditional rivals like Toyota and Honda.

Chinese car factories are more automated, their supply chains are more streamlined, and perhaps most importantly, their pricing tends to be more aggressive.

Companies like BYD and NIO have rapidly improved quality while scaling production, turning China into the world’s most competitive EV market.

Honda, by comparison, has struggled to keep pace, especially in terms of electric vehicles.

While it experimented with EVs as far back as the Honda EV Plus in the late 1990s, its modern EV push has been slower than rivals.

Recent efforts like the Honda e showed promise but were limited in scale, and the company has delayed key EV launches in China after determining they wouldn’t meet sales expectations.

The numbers reflect the challenge.

According to Nikkei Asia, Honda’s sales in China have dropped from around 1.6 million units in 2020 to just 640,000 in 2025, with factory utilization falling below profitable levels.

Meanwhile, competitors like Toyota and Nissan are partnering with Chinese firms to close the gap.

Looking ahead, it seems like Honda is betting heavily on a mix of engineering independence and global strategy.

It plans to build its upcoming ‘0 Alpha’ EV in India to reduce costs, while accelerating digitization across its production systems.

And what do people online think about Honda’s plans?

One Redditor had a straightforward solution for the carmaker’s woes.

“They need to start making affordable cars again for starters,” the person said.

Another pointed out that Ford CEO Jim Farley basically said the same thing after driving a Chinese EV for himself.

Of course, not everyone online is praising Chinese carmakers.

There are many who still stand behind Japanese carmakers like Honda.

“No self-respecting tradesperson shows up on site with Temu tools,” one Redditor said.

“Sure, Chinese vehicles will be cheaper, but I’ll take Honda reliability.”

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