Dongfeng Suddenly Walks Away From Decades-Long Honda Engine Venture

Since the precocious 1990s, Honda has worked broadside by broadside with Dongfeng successful China, producing hundreds of thousands of interior combustion engines done a long-standing associated venture.

That concern whitethorn soon look precise different, arsenic Dongfeng has decided to merchantability its 50 percent stake, a determination that reflects the crisp diminution of accepted motor income successful China and a increasing propulsion toward electrical vehicles.

Read: Honda S7 Is A $36,000 Electric SUV That’s Not For US

Dongfeng officially listed its involvement connected the Guangdong United Assets and Equity Exchange earlier this week. While nary reserve terms has been set, the listing carries a deadline of September 12.

Details successful the filing amusement the associated task held assets worthy 5.4 cardinal yuan ($752 million) past year, on with debts totaling 3.3 cardinal yuan ($459 million). The mill tied to the task employs 827 workers.

Pressure connected Legacy Partnerships

Japanese carmakers similar Honda person been feeling the compression from homegrown Chinese brands, galore of which person surged up successful producing innovative and competitory EVs. Dongfeng has faced a akin struggle, lagging down rapidly expanding rivals specified arsenic BYD.

The company’s yearly income archer the communicative clearly, falling from 3.8 cardinal vehicles successful 2016 to conscionable 1.5 cardinal past twelvemonth crossed some its ain marque and associated ventures with Honda and Nissan.

It’s unclear what the adjacent measurement for Dongfeng Honda volition be. Honda whitethorn opt to bargain retired Dongfeng and bring its Chinese motor cognition wholly in-house, oregon it whitethorn anticipation for different section marque to measurement successful for a caller associated venture. For now, Honda’s automobile accumulation associated task concern with Dongfeng remains intact.

Earlier this year, Honda introduced a caller EV designed specifically for the Chinese marketplace successful collaboration with Dongfeng. At the aforesaid time, it besides launched the GAC Honda GT done its different associated task with GAC Group, showing that portion the aged engine-focused exemplary whitethorn beryllium fading, the EV epoch is already shaping the company’s adjacent section successful China.