Chinese state-owned automaker Dongfeng Motor Group is reportedly planning to sell its 50% share in a joint venture with Honda Motor, marking a strategic move in response to China’s shift towards electric vehicles (EVs).
The JV, Dongfeng Honda Engine, was established in 1998 and has been producing engines for Honda vehicles in the Chinese market. The sale was announced on the Guangdong United Assets and Equity Exchange’s website, with interested buyers given until 12 September 2025 to submit their bids. The JV, which employs 827 individuals, was valued at 5.4bn yuan ($752m) in 2024 but reported a loss of 227.8m yuan and carries debts of 3.3bn yuan.
This move reflects the intense competition in China’s automotive sector, especially with the rapid transition to EVs. Japanese automakers like Honda, Nissan, and Toyota are facing challenges in adapting to the shift and are now trying to regain market share from local competitors such as BYD, a leading EV manufacturer in China.
Honda has been expanding its EV footprint in China, including reducing production capacity at its Guangzhou engine plant and initiating an EV production line in Guangzhou with a different Chinese automotive partner. Dongfeng Motor Group has also encountered difficulties, with its annual vehicle deliveries dropping from 3.8 million in 2016 to 1.5 million last year.
Last year, Honda inaugurated its first dedicated global EV manufacturing facility in Wuhan City, Hubei Province, China, as part of the Dongfeng Honda JV. The plant has an annual production capacity of 120,000 units and employs around 800 associates.
Overall, the sale of Dongfeng Motor Group’s stake in the JV with Honda signifies a strategic response to the evolving automotive landscape in China, with a focus on electric vehicles and adapting to changing market dynamics. This move could potentially reshape the competitive landscape in the Chinese automotive sector and pave the way for future collaborations and investments in the EV space.
