The blue "DONGFENG HONDA" signage at Dongfeng Honda Engine Co., Ltd. (referred to as "Dongfeng Honda Engine") in Guangzhou's Huangpu District has been officially dismantled, along with other related wall markings, marking the end of the 27-year-old joint venture. Reports indicate that the building will soon display "GAC HONDA" branding, as GAC Honda acquires Dongfeng Honda Engine, which may subsequently be renamed "GAC Honda Engine."
Currently, the company’s official website has updated its logo to "GAC HONDA," though the copyright notice at the bottom still identifies it as Dongfeng Honda Engine Co., Ltd.
On August 18, Guangdong United Assets and Equity Exchange disclosed that DONGFENG GROUP (00489) would sell its 50% stake in Dongfeng Honda Engine. DONGFENG GROUP stated that the divestment aims to optimize its fuel vehicle asset structure and support Honda’s strategic plans in China while accelerating its own transition to new energy.
On September 30, GAC GROUP (02238) announced its approval for GAC Honda to acquire DONGFENG GROUP’s 50% stake in Dongfeng Honda Engine for a base price of RMB 1.172 billion, funded through a cash injection. Upon completion, DONGFENG GROUP will fully exit Dongfeng Honda Engine, making it a wholly-owned subsidiary of GAC Honda.
The transaction was formalized on October 30, with GAC Honda and DONGFENG GROUP signing the equity transfer agreement for RMB 1.172 billion. GAC GROUP explained that the acquisition would enhance GAC Honda’s integrated operations in engine production, improve supply chain stability, reduce costs, and boost efficiency—laying a foundation for its electrification and smart transformation.
Established on May 26, 1998, Dongfeng Honda Engine primarily supplies engines and components to GAC Honda. Despite its name, the company has minimal ties to Dongfeng Honda. It operates under the "One Project, Two Companies" model, where GAC Honda handles vehicle assembly while Dongfeng Honda Engine provides powertrains (including engines and transmissions) for models like the Accord, Odyssey, and Avancier. Only a small portion of basic components, such as cylinder blocks, are supplied to Dongfeng Honda.
Financially, Dongfeng Honda Engine saw significant improvement in 2024, with revenue surging from RMB 9.566 billion in 2023 to RMB 17.852 billion, turning a net loss of RMB 228 million into an RMB 84 million profit. It remained profitable in H1 2025, posting revenue of RMB 3.807 billion and net profit of RMB 371 million.
The acquisition, pending antitrust approval, will enable GAC Honda to achieve full in-house engine supply, reducing external procurement costs and logistics expenses. Streamlined operations are expected to enhance production efficiency, lower costs, and improve vehicle price competitiveness—ultimately strengthening GAC Honda’s market position and supporting sustainable growth.
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