Chang'an Ford Mazda joint venture to be split

Chang'an Ford Mazda Automobile Co, a joint venture between Ford Motor Co, Mazda Motor Corp and Chang'an Automobile Group, would be split into two independent companies, Reuters reported Monday, a move analysts said will help Mazda seize more market share in China.

According to the separation plan, the two new companies would be called Chang'an Ford Co, based in Chongqing in Southwest China, and Chang'an Mazda Co, headquartered in Nanjing, East China's Jiangsu Province, said the report.

"We're very pleased with the restructuring and the way it's going. We have approval from (China's central government), and we're proceeding through the regulatory process…so we're very, very appreciative and encouraged," Alan Mulally, CEO of Ford Motor Co, told Reuters Monday in Chongqing.

Ford Motor Co and Mazda Motor Corp were destines to separate because they hold different operation ideas and have different cultural backgrounds, Su Hui, a director of the China Automobile Dealers Association, told the Global Times Monday, "Ford is a US carmaker while Mazda is Japanese."

Ford held 35 percent shares of Chang'an Ford Mazda, influencing the development of Mazda in the Chinese automobile market, said Su. "Therefore the separation would benefit both, especially Mazda."

In 2001, Ford and Chang'an Automobile Group established a joint venture, Chang'an Ford Co. In March 2006, the joint venture was renamed as Chang'an Ford Mazda Automobile Co after investment from Mazda. Since then, Mazda held 15 percent stake in the joint venture with Chang'an Automobile Group holding 50 percent and Ford 35 percent.

It is wise for the two companies to establish their independent sales channels in China as Ford has large enough scale of its own and could hardly help Mazda increase its sales in China, noted Li Haiying, an auto analyst with Anbound Consulting.

"The sales of Mazda brand cars have not been strong in China since it entered the market, especially cars sold by Chang'an Ford Mazda Automobile Co," Li told the Global Times Monday.

Mazda sold cars in China through two major partners, FAW Mazda Motor Sales Co and Chang'an Ford Mazda Automobile Co, said Li.