(Yicai Global) Sept. 7 -- Japan’s Honda Motor said it will set up a joint venture in Beijing with two Chinese partners at the end of this month to centralize the procurement of power batteries.

At the same time, Honda China has inked an agreement with Chinese power battery titan Contemporary Amperex Technology to build a long-term, stable supply system for power batteries, the carmaker said in a statement posted on its WeChat account today.

According to the press release, Honda will set up the JV, named HDG Beijing Trading Service, with GAC Group and Dongfeng Motor, with the three parties holding 50 percent, 25 percent and 25 percent, respectively. Investment amounts were not disclosed.

Honda’s two joint ventures in China -- Dongfeng Honda Automobile and Guangqi Honda Automobile, GAC-Honda -- buy power batteries from CATL, which is based in Ningde, Fujian province. In future, these will be centrally procured by the new JV.

Moreover, Honda will kick off negotiations with CATL over the intensive production and recycling of batteries, based on CATL’s Yichun plant that is now under construction, so as to ensure long-term, steady supply.

In 2020, Honda signed a comprehensive partnership deal with CATL on new energy vehicle power batteries, including their joint development, supply, recycling and reuse. The new JV will further strengthen the Japanese carmaker’s cooperation with the Chinese battery titan.

Honda plans to launch 10 pure-electric vehicle models in China by 2027. GAC-Honda and Dongfeng Honda have also started building NEV plants. Through these initiatives, Honda remains fully committed to accelerating electrification.

Benefitting from the launch of a number of new vehicles, Honda sold nearly 137,000 units in the Chinese market last month, an almost 49 percent increase from a year earlier and the steepest this year, according to Honda China data released on Sept. 5. It sold nearly 950,000 vehicles in the first eight months of the year, equal to 96 percent of that in the same period of last year.

Editor: Peter Thomas