TOKYO -- Honda Motor will end direct ownership of a Chinese factory that builds cars for export as the automaker channels resources into capturing a bigger slice of the world's largest car market.
Honda said Thursday it plans to sell its 65% stake in Guangzhou-based Honda Automobile, which produces City sedans for the Mexican market, to a local joint venture.
The move comes as the Japanese automaker prepares to restart sales of its flagship CR-V sport utility vehicle in China after authorities approved plans for a recall of the popular model.
Operating rates have slowed at the export factory, which has an annual output capacity of 50,000 units.
Guangqi Honda Automobile, a 50-50 venture with Guangzhou Automobile Group, will buy Honda's stake in the factory operator for 602 million yuan ($94.5 million) in August.
The buyer plans to acquire all of the unit by purchasing Guangzhou Automobile's 25% stake and Dongfeng Motor Group's 10% interest.
China is the world's biggest auto market, with new-car sales reaching 28.87 million units last year, outpacing U.S. volume by more than 10 million vehicles. Honda clinched record Chinese sales of 1.45 million vehicles last year and aims to keep the momentum going this year.
Guangqi Honda's plants have been operating at full capacity to produce cars such as Accord sedans and Vezel sport utility vehicles.
The joint venture plans to roll out electric vehicles in the Chinese market this year. By 2025, Honda plans to release more than 20 electric models.
Foreign automakers face a 50% cap on ownership of Chinese joint ventures, but the rule does not apply to factories that produce cars for export.