Asia Tech Wire (Mar 13) -- Nissan Motor and Honda Motor are considering cutting production in China as they face stiff competition from local electric car makers such as BYD, according to Nikkei.

The report said that Nissan will negotiate with local joint ventures in the coming days and may cut production capacity in China by up to 30%, equivalent to 500,000 units per year.

Nissan, Japan's third-largest automaker, will rearrange its production lines in China and redirect part of its capacity to export to other Asian markets.

Honda, Japan's second-largest automaker after Toyota Motor, also plans to reduce its production capacity in China by 20% to about 1.2 million units.

The Nikkei said Honda is in discussions with its Chinese partners and has informed key suppliers that it will reduce output.

A Nissan spokesperson said the report was untrue but didn't elaborate, while Honda said it hadn't yet made a decision to cut production and declined to comment further.

Nissan operates eight factories in China through a joint venture with Dongfeng Motor Group Co Ltd (0489.HK), with a capacity of 1.6 million units a year.

In 2023, Nissan's China sales fell 24% year-on-year to 793,768 units, the first time in 14 years that it has dropped below 1 million units.

Honda, meanwhile, operates seven plants in China through two joint ventures with Guangzhou Automobile Group Co Ltd (2238.HK) and Dongfeng, with a total capacity of 1.49 million units per year.

And in 2023, Honda sold 1,234,181 units in China, down about 10% from the previous year.