China’s state-owned carmaker Dongfeng Motor has listed its 50 per cent stake in the Dongfeng Honda Engine joint venture for sale, reflecting the country’s accelerating transition toward electric vehicles. The joint venture, which produces engines for Honda’s Chinese models, has been operating in Guangzhou since 1998.
The sale was posted on the Guangdong United Assets and Equity Exchange on Monday, with bids open until Sept. 12. The platform has not specified a minimum price, leaving the potential financial outcome of the transaction unclear.
Dongfeng Honda Engine has struggled financially in recent years. The unit posted a loss of 227.8 million yuan ($27 million) in 2024 and carries debt of 3.3 billion yuan ($392 million), according to the stock exchange listing. Production has also been scaled back, with Honda reportedly halving output at the plant earlier this year.
Industry analysts attribute the decline to the rapid growth of China’s electric vehicle market, with domestic players such as BYD, Leapmotor, and Li Auto increasing sales, alongside rising volumes from Xpeng and Nio. By contrast, Dongfeng, which also collaborates with Nissan, sold just 1.5 million vehicles in 2024, down from 3.8 million in 2016.
Despite the sale, Dongfeng and Honda continue to collaborate on electric vehicles. In October 2024, the partners inaugurated a Wuhan plant capable of producing 120,000 new energy vehicles annually. Honda plans to introduce ten electric models under its brand in China by 2027, with particular emphasis on its Ye series. The company aims to transition to an all-electric lineup in China by 2035.
Source: bloomberg.com, reuters.com