Honda wants North America to unite against Chinese cars
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Honda is urging the U.S., Canada and Mexico to coordinate policies to keep Chinese automakers from gaining a foothold in the American market — even as it acknowledges their arrival is ultimately inevitable.
Why it matters: Chinese automakers are expanding rapidly around the world with inexpensive, technologically sophisticated vehicles, putting pressure on established carmakers to move faster and slash costs.
- "We're not going to be able to keep them out forever," Jennifer Thomas, senior vice president of corporate affairs at American Honda, told reporters during a roundtable discussion Tuesday.
- The challenge, she said, is using that time to become more competitive before Chinese automakers arrive.
Driving the news: Honda is pressing Washington to use upcoming negotiations over the U.S.-Mexico-Canada trade agreement (USMCA) to coordinate restrictions on Chinese vehicles and investment across North America.
- In Canada, Honda has objected to a new import quota allowing up to 49,000 Chinese vehicles annually and is urging officials not to expand it or to encourage Chinese automotive investment in the country.
- In Mexico, where Chinese brands already have a significant presence, Honda is delivering a similar message.
Between the lines: Honda has large factories in both countries that supply U.S. dealerships.
- Thomas said USMCA negotiations could strengthen rules of origin to prevent Chinese vehicles or components from entering the U.S. through its neighbors.
What they're saying: "The U.S. can't do it alone," Thomas said. "It's going to take working with our neighbors to the north and south, working with allies like Japan in order to combat this threat."
The intrigue: Honda's position is striking for a Japanese automaker that helped transform the American auto industry through foreign competition decades ago.
- "It's not lost on me that Honda, a company that has thrived through free trade and foreign direct investment here in this country, is advocating so aggressively to keep another international OEM out of this market," Thomas acknowledged.
- She argued that Chinese automakers benefit from government support that makes fair competition difficult.
Meanwhile, Honda is racing to become more competitive through an internal initiative called "Triple Half," aimed at cutting vehicle development time, costs and workload by 50% compared with 2025 levels over the next several years.
- The company is also pushing for passage of the bipartisan Connected Vehicles Security Act, which would strengthen existing restrictions on Chinese vehicle technology.
Reality check: Thomas believes Chinese automakers will eventually break through because American consumers will demand their affordable, high-tech vehicles.
- As Americans encounter Chinese cars in Canada and Mexico, she said, they'll increasingly wonder why they can't buy them at home.
- "I think it comes from the bottom up, and that is ultimately hard to stop, hard to contain," she said.
