(Yicai) Aug. 19 -- Chinese carmaker Dongfeng Motor Group plans to sell its 50 percent stake in a joint venture with Japan’s Hong Motor in a move intended to accelerate its shift to new energy vehicles as the Chinese market rapidly electrifies.

A reserve price has not yet been set for the half stake in Dongfeng Honda Engine, and the listing deadline is Sept. 12, according to an announcement released on the website of the Guangdong United Assets and Equity Exchange yesterday.

China’s growing NEV market will create tougher conditions for both domestic and joint venture automakers, Dongfeng Motor said, adding that the Wuhan-based company plans to streamline its internal combustion vehicle assets to better support Honda's expansion in the country while accelerating its transition to NEVs.

Established in Guangzhou in 1998, Dongfeng Honda Engine swung into the black with a net profit of CNY371 million (USD51.6 million) in the first half of this year, despite revenue plunging 60 percent to CNY3.8 billion (USD532 million) from a year ago. It employs 827 workers. Honda Motor owns 40 percent of the JV, and Honda Motor China Investment the rest.

Because Chinese regulators now assess the new energy businesses of central state-owned enterprises separately, Dongfeng Motor faces less short-term pressure to make its NEV operations immediately profitable, a spokesperson told Yicai. This allows the company to allocate more resources to its independent NEV business, pursue bold innovations in its operational framework, and assist the electrification of its JVs, the person added.

Dongfeng Motor considers its role in the development of Dongfeng Honda Engine to be largely completed, the spokesperson pointed out.

Market speculation had suggested that GAC Honda, the Japanese automaker's China JV with GAC Group, could buy Dongfeng Motor’s half of Dongfeng Honda Engine. Media outlet Cailianshe yesterday quoted a Honda China representative as saying that "only officially disclosed information is available."

GAC Honda's sales slid 26 percent to 154,647 units in the six months ended June 30 from a year earlier, while those of Dongfeng Honda tumbled 37 percent to 148,990. Honda China's sales sank 31 percent to 852,300 last year and the firm shut its Guangzhou and Wuhan JV factories, reducing its annual ICE vehicle production capacity to 1 million units from 1.49 million.

Dongfeng Motor expects its net profit to have plunged 90 percent to 95 percent to between CNY30 million and CNY70 million (USD4.2 million and USD9.8 million) in the first half of this year.

Editor: Martin Kadiev