Dongfeng Motor to sell 50% stake in Honda JV

BEIJING: State-owned Chinese automaker Dongfeng Motor Group Co is selling its 50% stake in a joint venture with Honda Motor Co, in a reflection of the country's rapid shift away from petrol-powered vehicles.

Guangzhou-based Dongfeng Honda Engine Co was founded in 1998 and produced engines for Honda vehicles in China.

Dongfeng listed its stake for sale on the Guangdong United Assets and Equity Exchange on Monday, according to the exchange website.

A reserve price has yet to be set and the listing deadline is Sept 12.

The factory employs 827 workers.

The plan to divest the business highlights how cutthroat the Chinese market has become in its fast-paced shift to electric vehicles.

Japanese brands including Honda, Toyota Motor Corp and Nissan Motor Co have been caught flatfooted and now face the tough task of trying to make up ground lost to domestic champions like BYD Co.

Honda slashed production capacity at the Guangzhou engine plant by half earlier in the year, according to Japanese media reports.

It set up an EV production line in the same city with another Chinese automaker partner, which started operations late last year.

Competition has intensified among Chinese firms too.

Dongfeng, which has joint ventures with both Honda and Nissan, has seen annual deliveries slump from a peak of 3.8 million vehicles in 2016 to 1.5 million last year, according to data from the China Automotive Technology and Research Center.