Nissan is strengthening its position in China’s SUV market with a fresh collaboration alongside Dongfeng Motor Group. Together, they will be investing around RM676 million into a new company dedicated to building and selling off-road SUVs.

According to details released, Dongfeng Motor will take the largest share at 40%, while Dongfeng Nissan – the existing 50:50 joint venture between the two companies – will secure roughly 10%. Two other companies based in Xiangyang, Hubei province, are also set to participate. The agreement will run for 20 years, although the new firm’s official name and the timing for its first product launches remain under wraps.

Dongfeng Nissan’s share of the contribution is expected to come mostly in the form of assets rather than cash. This includes dies, production lines, and other equipment, along with development systems and intangible resources. There is also the possibility that Dongfeng Nissan could play a direct role in vehicle production once the new company is operational.

Nissan itself has yet to make a formal statement on the deal, but the move is significant for Dongfeng Motor, which has struggled to keep up with the rapid electrification of China’s car market. The company’s performance has been under pressure for some time, and only recently it confirmed plans to delist from the Hong Kong Stock Exchange while preparing to spin off and publicly list the unit behind its Voyah electric vehicle brand.

While much of China’s automotive industry is rushing towards EVs, Nissan and Dongfeng are betting that there is still strong demand for tough off-road SUVs. The partnership could give both companies a fresh foothold in a segment that still appeals to a sizeable number of buyers.