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Honda and the Chinese state-owned group GAC have formalized the renewal of the GAC Honda Automobile contract, a collaboration that the Japanese automaker has maintained in China since 1998. This new agreement, announced by Honda China on July 20, extends the partnership's validity until 2038, maintaining a 50% equity split for both parties.

Details of the Contract Renewal

The initial contract, set to last 30 years, would have ended in 2028. With the renewal signed in early July, ten years are added to this term, totaling twelve years if counted from the signing date. This extension is significant because there were recent market speculations that Honda might be withdrawing from China.

Context of Challenges in the Chinese Market

Doubts about Honda's permanence were based on financial results: in the first half of 2026, GAC Honda recorded deliveries of 68,318 vehicles, representing a sharp drop of 55.8% compared to the same period last year. In June, sales reached 14,099 units, a setback of 53%, while production plummeted by over 83%, settling at only 5,201 cars.

Industry analysts in China suggested that negotiations might have stalled due to GAC's pursuit of greater control over the venture. This scenario is not isolated; brands resulting from joint ventures between international automakers and Chinese groups are rapidly losing relevance under the pressure of price wars and the growth of local manufacturers specializing in electric and hybrid vehicles. Data from the CPCA association indicates that retail sales of these brands fell by 34% in June compared to the previous year. Furthermore, another major contract, that of SAIC-GM, which is also completing 30 years, has its expiration scheduled for June 2027 and is currently under negotiation.

Shift in Collaboration Model

The previous partnership format relied on technology transfer from Japan to China. However, the new arrangement involves joint operation in various areas, including product definition, research and development, and supply chain management. This marks a transition from a 'receiving technology' model to a 'co-creating technology' model, which the Chinese press has dubbed the era of 'joint ventures 2.0'.

Future Projects and Corporate Structure

By 2027, GAC Honda plans to launch three new models: an updated version of the Accord, a vehicle equipped with Honda's fifth-generation i-MMD hybrid system, and an internally developed car using an electrified platform specifically aimed at the Chinese consumer. The operation, initially named Guangzhou Honda, was established in July 1998 and constituted Honda's first joint venture for automotive production and sales in China. The factory located in Guangzhou, Guangdong province, began operations in March 1999 and has already accumulated deliveries of over 11 million vehicles, covering sedans, SUVs, minivans, and electric models.

In terms of corporate composition, GAC holds 50% of the shares, Honda Motor holds 40%, and the Japanese company's Chinese investment arm accounts for the remaining 10%. For the Brazilian public, GAC is not unknown, as it began commercial operations in Brazil in 2026 with the Aion UT and Aion V electric models, in addition to the GS3 SUV, and plans to start local production from 2027.

Vivo has expressed its intention to deactivate its legacy 2G network as quickly as possible, as maintaining this infrastructure in Brazil has become economically unviable. During a press conference to present its financial results this Tuesday (28), CEO Christian Gebara stated that the shutdown of the old network aims to reduce high operational costs and free up frequency spectrum, with the ultimate goal of boosting 4G and 5G services.

Obstacles to 2G Shutdown

Despite the urgency expressed by the board, Vivo has not yet released a definitive schedule for the end of second-generation service, facing several impediments. The biggest challenge lies in the vast number of corporate devices that still rely on the old signal to operate.

Although the 2G signal may be associated with slowness, it remains crucial for the Internet of Things (IoT) segment. May data shows that while 4G holds 64.4% of lines and 5G reaches 23.9%, 2G still represents 6.7% of the business connection market. It is notable that the second-generation network surpasses the participation of 3G, which currently accounts for only 5.1% of the market.

This persistence of 2G is mainly maintained by the corporate sector. As explained by Gebara to the portal Convergência Digital, the need for 2G use by common users is minimal, but devices such as fleet trackers, smart meters from energy concessionaires, and old credit card terminals remain linked to the obsolete network.

Regulatory and Market Intervention

In practice, these numerous customers need to physically migrate to more modern technologies before the operator can remove the antennas. To mitigate this problem, the National Telecommunications Agency (Anatel) intervened, signaling its intention to suspend the approval of mobile phones and devices limited to 2G or 3G. This measure aims to curb the entry of outdated devices into the national market, forcing the industry to adopt more modern standards.

Even with these actions, the market continues to support the old format. Manufacturers continue to release basic and low-cost devices, such as the Nokia 123 Shield phone, which comes from the factory using the GSM standard, indicating that the 2G ecosystem is still active.

Infrastructure Sharing with TIM

While the complete shutdown does not occur, large telecommunications companies have found a financial alternative in infrastructure division. Vivo maintains a joint network usage agreement, called RAN Sharing, with TIM, which allows them to share operational costs.

In the specific context of GSM (2G), this agreement is deeper, involving the decommissioning of one company's legacy network. Instead of each company maintaining its own tower in the same location, generating higher energy consumption and duplicated maintenance, one of their antennas is deactivated. In this way, customers with devices restricted to the GSM signal begin to use the other operator's 2G network entirely, eliminating structural redundancy.

Ultimately, the market strategy of Brazilian operators points toward a gradual shutdown. This allows the frequency bands currently wasted by 2G ghost traffic to be fully released. With these virtual lanes available, modern connections will receive more traffic bands, ensuring greater capacity, stability, and speed to meet the increase in data consumption in the country.