Ford-Mazda split spins new partnerships

The three-way joint venture between Chang'an Automobile Group, Ford and Mazda has finally split following a lengthy procedure that began in 2010.

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Both foreign carmakers now have separate 50-50 joint ventures with Chang'an, according to a joint statement released on Nov 30.

Li Ying, spokeswomen for Ford Motor China, told China Daily that the partnership between Ford and Chang'an will retain the Chongqing plants from the former three-way venture, as well as a plant that just broke ground in Hangzhou in August.

Existing facilities in Nanjing will be left to Chang'an Mazda, she said.

Ford's Fiesta model will continue to be built at the Nanjing plant, but for how long is uncertain, she said.

The restructuring was initiated as Ford began to shed its former controlling stake in Mazda. The new partnerships are expected to help both foreign carmakers in China as they are now free to focus on their individual development, said industry analysts.

Ford first established a 50-50 joint venture with Chang'an in 2001. Five years later, Mazda joined with a 15 percent stake, reducing Ford's share to 35 percent.

Ford was then the majority shareholder in Mazda, but began to sell its holdings in 2008. Today it has just 3.5 percent of the Japanese carmaker's stock.

Ford's divestiture comes as it aggressively expands production and its product portfolio in an attempt to narrow the gap in China with Volkswagen and General Motors.

Ford sold about 520,000 vehicles in China last year, far behind sales by GM and Volkswagen, both of which sold well above 2 million vehicles.

Ford offensive

As part of its offensive to bring 15 new vehicles to China by 2015, Ford recently started to produce the Kuga and EcoSport SUVs at its joint venture. Its current locally made lineup also includes three cars and an MPV - the Fiesta, Focus, Mondeo and S-Max.

To manufacture more models in China, the carmaker has invested intensively in new facilities. It started construction on its third Chongqing plant in August. Later that month it broke ground on a new plant in Hangzhou. It also has an engine and transmission plant under construction in Chongqing.

The expansion, the largest by Ford in 50 years, will double the company's total production capacity in China to 1.2 million vehicles by 2015. It also plans to expand its dealership network to 680 outlets by 2015, double the number in 2010.

For Mazda, the separation marks its first 50-50 joint venture to produce vehicles in China. It also makes cars with FAW Group under technology cooperation agreements.

The company produces the Mazda 2 and 3 at the Nanjing plant and it plans to introduce new models including the CX-5 SUV next year to boost sales in China.

Partly due to a consumer boycott following the territorial dispute between China and Japan over the Diaoyu Islands, Mazda's sales tumbled by 11.3 percent between January and November to fewer than 170,000 units. About 67,700 of the vehicles were made at the joint venture with Chang'an.

Observers said that one reason the Ford Fiesta will continue production in Nanjing is that the factory would otherwise be mostly idle due to falling Mazda sales.

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