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Sunday, January 3, 2021

Honda to Pull Out of a Major European Market

Honda is continuing its global restructure with reports pointing that it will pull out of another major market in 2022. Reports say the automaker will stop supplying new cars to the Russian market by then.

The Japanese carmaker, which has no plants in Russia, sold just 79 vehicles last November—a 50 percent drop from a year earlier. Cumulatively, its January to November numbers were down 15 percent to 1,383 vehicles; this is compared to 1.3 million new cars sold there during the same period.

Honda says it will keep its presence on the Russian market with motorcycle and power equipment sales. It will also retain its activities related to the aftersales service of its vehicles.

This move is the latest in a string of closures and consolidations for Honda. Lately, it closed one of its Indian manufacturing plants along with its assembly footprints in China, the U.K., and the Philippines.

Under previous CEO Takanobu Ito, Honda had an ambitious goal of selling an annual 6 million cars globally, with manufacturing plants built or expanded around the world. However, the expansion took a toll on Honda’s earnings. Current CEO Takahiro Hachigo opted instead for optimized operations around the world.

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