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Mazda to take equity stake in JV
By Gong Zhengzheng (China Daily)
Updated: 2004-03-23 10:35

Japan's Mazda Motor will take an equity stake in its parent firm Ford Motor's joint venture (JV) with Chang'an Motor, China's biggest mini vehicle maker, according to a company executive.

"Mazda will have equity relations with our joint venture under Ford's requirements," Chang'an President Yin Jiaxu told China Daily.

It will pave the way for the JV to produce Mazda cars, Yin said.

Chang'an will retain its 50 per cent stake in the JV, he said.

Ford now controls a 50 per cent share in the venture, based in Southwest China's Chongqing Municipality.

Yin did not reveal details and Ford China Corp declined to comment.

The JV, or Chang'an Ford, created in 2001 with a total investment of US$98 million, is Ford's first passenger car base in China, the world's fastest-growing major car market.

Mazda's JV move is understood as an important part of Ford's overall Chinese strategy, focusing on collaboration with Chang'an.

Ford hopes Mazda will form links with Chang'an, although the Japanese automaker has a presence in China with First Automotive Works Corp (FAW), the nation's biggest vehicle producer.

There was an exclusive agreement between Ford and Chang'an, stipulating that all new activities of the US giant, including its affiliate brands, should be associated with the Chinese firm when the two parties created a strategic partnership in October.

Mazda, 33.4 per cent owned by Ford, has technical licensing deals with FAW Car Co Ltd - FAW's affiliate based in Northeast China's Jilin Province - allowing for the production of the Mazda M6 sedan at the end of 2002.

Sources from Shanghai-listed FAW Car told China Daily that the company will produce seven new models based on the Mazda M6 platform within the next two years.

FAW's other plant in South China's Hainan Island is also making Mazda's Premacy and Familier cars under technical licensing agreements with the Japanese firm.

More than 80,000 Mazda cars were produced and sold in China last year.

Mazda and FAW will reportedly set up a JV locally.

"Mazda's entry into Chang'an Ford indicates that Ford expects to expand swiftly in China by introducing non-US models suitable to the market, like DaimlerChrysler and General Motors (GM)," said Zhang Xin, an auto analyst with Guotai & Jun'an Securities Co.

Beijing Jeep, DaimlerChrysler's JV in China's capital, started to produce the Pajero sport utility vehicles of Japan's Mitsubishi Motor, 37.3 per cent owned by the German-US giant, at the beginning of last year.

Mitsubishi also intends to have a equity stake in Beijing Jeep.

GM introduced the Excelle sedan, based on its South Korean affiliate Daewoo Motor's platform, into its JV in Shanghai late last year.

Ford has announced that it will introduce all of its brands in China, such as Lincoln, Jaguar, Volvo and Land Rover.

The JV, which is producing the Ford Fiesta compact car and Mondeo sedan, will build a new plant in East China's Jiangsu Province as part of the two parent firms' joint investment worth up to US$1.5 billion in the coming years.

Ford, outmaneuvered by GM in a Shanghai sedan project in 1997, is lagging far behind other world automakers in China because of its late entry into the market.

Ford said it aims to increase the sales of all of its brands in China to 200,000 vehicles this year from 120,000 units in 2003 .

Chang'an Ford expects to sell at least 65,000 cars this year, up from nearly 20,000 units last year, Yin said.

The company also runs a JV in East China's Jiangxi Province with a local partner, manufacturing the Transit commercial wagon.

Ford has a 30 per cent stake in the JV, which was established in 1997.

Total sales of vehicles made in China surged by 34 per cent to 4.4 million units last year, including 1.97 million passenger cars.

Volkswagen, the biggest carmaker in China, sold nearly 700,000 cars last year. GM sold more than 386,000 vehicles.

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