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Since the late 1990s, Honda has partnered with Dongfeng in China, producing hundreds of thousands of gasoline engines through a long-standing joint venture. However, this dynamic may soon shift as Dongfeng decides to sell a 50% stake, reflecting the sharp decline in traditional engine sales and the growing shift toward electric vehicles.
Earlier this week, Dongfeng officially listed the stake on the Guangdong United Property Rights and Equity Exchange. While no starting price has been announced, the bidding period is set to close on September 12.
According to the filing, the joint venture held assets worth 5.4 billion yuan ($752 million) last year, alongside liabilities of 3.3 billion yuan ($459 million). The venture’s factory currently employs 827 workers.
Japanese automakers like Honda are facing intense pressure from China’s homegrown electric vehicle brands, which are increasingly competitive and innovative. Dongfeng, too, is struggling, lagging behind fast-growing rivals like BYD.
The future of Dongfeng Honda remains uncertain. Honda could acquire the stake to regain direct control over its Chinese engine operations or seek a new local partner for a fresh joint venture.
Dongfeng’s annual sales figures highlight a steep decline. Vehicle sales plummeted from 3.8 million units in 2016 to just 1.5 million last year, including both its own brands and joint ventures with Honda and Nissan.
Earlier this year, Honda unveiled a new electric vehicle model specifically for the Chinese market in collaboration with Dongfeng. Simultaneously, the company launched the GAC Honda GT through its joint venture with GAC Group, signaling that the old gasoline-engine model is fading as the electric era shapes Honda’s next chapter in China.
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