Honda Motor Co. is slashing its full-time production workforce in China amid slumping sales in the market, with some 1,700 employees or over 10 percent of the total staff having applied for voluntary layoffs, sources familiar with the matter said Wednesday.

GAC Honda Automobile Co., a joint venture between Honda and Chinese state-owned automaker Guangzhou Automobile Group, began soliciting for the early exit scheme earlier this month amid an intensifying price war in the world's largest auto market, where electric vehicles account for more than 20 percent of new car sales.

The final figure for voluntary retirement is not yet fixed, the sources said. Japanese carmakers, often seen as slow to embrace EVs, are struggling to maintain their presence in the global market amid stiff competition with rivals such as Tesla Inc. and BYD Co.

Photo taken on April 25, 2024, shows Honda Motor Co.'s booth at the Beijing International Automotive Exhibition in the Chinese capital. (Kyodo)

The market share of Japanese automakers in China stood at 12.2 percent in the January-April period this year, down sharply from 23.1 percent in 2020, according to the China Association of Automobile Manufacturers.

In contrast, the share of Chinese automakers soared to 60.7 percent in the first four months of this year from 38.4 percent in 2020.

In April, new vehicle sales of Honda in China fell 22.2 percent from a year earlier, while those of Toyota Motor Corp. and Nissan Motor Co. decreased 27.3 percent and 10.4 percent, respectively.

Last year, Mitsubishi Motors Corp. decided to withdraw from the Chinese market amid declining sales.

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