According to Shanghai United Assets and Equity Exchange, Dongfeng Motor Corporation (Dongfeng Motor) has put its 10% stake in Honda Automobile (China) Co.,Ltd (Honda China) up for sale at a listed price of RMB 94,870,000 on January 2, 2018.
Honda China is a joint venture which has four shareholders, Honda (55%), Honda Motor (China) Investment Co., Ltd (10%), Guangzhou Automobile Group Co., Ltd (herein after GAC) (25%) and Dongfeng Motor (10%). Besides, Honda China is not qualified to sell products in China's market. Clearly, Dongfeng Motor's stake transfer will bring about a ownership structure change to Honda China.
On December 16, 2017, Guangzhou Automobile Group Co., Ltd. (GAC) had announced to transfer its 25% stake in Honda China through the open market and the floor price for its stake in Honda China would be around RMB 23.2 million. Meanwhile, GAC also approved GAC Honda's plan to acquire 100% stake of Honda China. To some degree, Dongfeng Motor transferring its stake in Honda China may promote GAC Honda's acquisition.
Cui Shudong, secretary-general of China Passenger Car Association (CPCA) stated that GAC Honda is challenged by its insufficient production capability. At present, GAC Honda has three production lines with total annual production capability of around 720 thousand units. If GAC Honda completes its acquisition of Honda China, the acquirer's production capability will be probably increased in future.
In addition to Dongfeng Motor and GAC, the other shareholders of Honda China all intend to sell their stakes in Honda China, while their plans are still up in the air now.
Apart from selling the stake in Honda China, Dongfeng Motor had other movements of selling assets. For instance, in September 2017, Dongfeng Motor permitted to sell 85% stake of Dongfeng Real Estate Co., Ltd. In November 2017, Dongfeng Motor signed a framework agreement with China Resources Group to hand over Dongfeng Motor's businesses of property management to China Resources Group.