Honda Motor Company announced on Wednesday that it would suspend or reduce production at several factories in Japan and China starting late this month, the latest sign that a global scramble for automotive semiconductors continues to haunt the industry's recovery.
Global automotive sales are likely to edge higher in 2026, returning roughly to pre-pandemic levels, but the industry should not expect a swift or robust recovery, according to Jay Shen, managing director of the Garmin Asia Auto OEM Group. While demand is improving compared with 2025, he said, structural pressures and policy uncertainty will continue to weigh on growth.
The global auto industry is entering an unusual phase of expansion—one driven less by strategic ambition than by the need to survive. China's automakers have unleashed a surge of exports that, at first glance, looks like an aggressive push into overseas markets. Beneath the surface, however, lies a harsher reality: cutthroat competition at home and a deepening structural overcapacity that is leaving many firms with few viable alternatives.
China's push to dominate the future of intelligent transport reached a milestone this week as the Ministry of Industry and Information Technology (MIIT) granted its first approvals for the mass production of "Level 3" (L3) autonomous vehicles.
