Dongfeng Suddenly Walks Away From Decades-Long Honda Engine Venture

- Dongfeng is selling its 50 percent stake in a long-running engine joint venture.
- The partnership with Honda has operated since 1998 and built combustion engines.
- The joint venture factory employs 827 workers and carries 3.3 billion yuan in debt.
Since the late 1990s, Honda has worked side by side with Dongfeng in China, producing hundreds of thousands of internal combustion engines through a long-standing joint venture.
That partnership may soon look very different, as Dongfeng has decided to sell its 50 percent stake, a move that reflects the sharp decline of traditional engine sales in China and a growing push toward electric vehicles.
Read: Honda S7 Is A $36,000 Electric SUV That’s Not For US
Dongfeng officially listed its stake on the Guangdong United Assets and Equity Exchange earlier this week. While no reserve price has been set, the listing carries a deadline of September 12.
Details in the filing show the joint venture held assets worth 5.4 billion yuan ($752 million) last year, along with debts totaling 3.3 billion yuan ($459 million). The factory tied to the venture employs 827 workers.
Pressure on Legacy Partnerships
Japanese carmakers like Honda have been feeling the squeeze from homegrown Chinese brands, many of which have surged ahead in producing innovative and competitive EVs. Dongfeng has faced a similar struggle, lagging behind rapidly expanding rivals such as BYD.
The company’s annual sales tell the story clearly, falling from 3.8 million vehicles in 2016 to just 1.5 million last year across both its own brand and joint ventures with Honda and Nissan.

It’s unclear what the next step for Dongfeng Honda will be. Honda may opt to buy out Dongfeng and bring its Chinese engine operation completely in-house, or it may hope for another local brand to step in for a new joint venture. For now, Honda’s automobile production joint venture partnership with Dongfeng remains intact.
Earlier this year, Honda introduced a new EV designed specifically for the Chinese market in collaboration with Dongfeng. At the same time, it also launched the GAC Honda GT through its other joint venture with GAC Group, showing that while the old engine-focused model may be fading, the EV era is already shaping the company’s next chapter in China.
