Chinese state-owned automaker Dongfeng Motor Group is reportedly preparing to divest its 50% share in a joint venture (JV) with Honda Motor, signalling a strategic move amidst the country’s rapid transition towards electric vehicles (EVs).
The JV, Dongfeng Honda Engine, established in 1998, has historically produced engines for Honda’s vehicles in the Chinese market.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The sale was announced on the Guangdong United Assets and Equity Exchange’s website, with the listing yet to determine a reserve price, according to Bloomberg report.
Interested buyers have until 12 September 2025 to submit their bids.
According to the listing’s audited results, the JV, which employs 827 individuals, was valued at 5.4bn yuan ($752m) in 2024 but suffered a loss of 227.8m yuan and is carrying debts of 3.3bn yuan.
This move underscores the intense competition within China’s automotive sector, particularly with the swift industry-wide pivot to EVs.
Japanese automakers like Honda, Nissan Motor, and Toyota Motor have struggled to adapt quickly and are now striving to regain market share from local competitors, including the leading EV manufacturer BYD, noted the publication.
Earlier in the year, Honda reduced the production capacity of its Guangzhou engine plant by half, as reported by Japanese media.
Concurrently, Honda has been expanding its EV footprint in China, having initiated an EV production line in Guangzhou with a different Chinese automotive partner, which commenced operations in the latter part of the previous year.
Dongfeng Motor Group itself is said to have faced challenges, with its annual vehicle deliveries plummeting from 3.8 million in 2016 to just 1.5 million last year, data from the China Automotive Technology and Research Center shows.
Last year, Honda began operations at its inaugural dedicated global EV manufacturing facility in Wuhan City, Hubei Province, China.
This plant, part of the Dongfeng Honda JV, has an estimated annual production capacity of 120,000 units. As of October 2024, it employs roughly 800 associates.
