Mazda Combines Ventures With China Partners to Combat Sales Slump

(Nikkei Asia) — Mazda Motor will essentially merge its two key joint ventures in China, the Japanese automaker announced Tuesday, paving the way toward streamlining operations and reviving its flagging sales in China.

Mazda’s new car sales in China have fallen every year since peaking out at about 310,000 vehicles in 2017, reaching about 210,000 in 2020. January-July sales also fell 4% on the year.

In an effort to stop the decline, Mazda will unite its operations in the country, now divided between its joint ventures with China FAW and Chongqing Changan Automobile.

Mazda currently has a 40% stake in FAW Mazda Motor Sales, with the remainder held by FAW, and an equally held 50% stake in Changan Mazda Automobile.

The capital stakes will be restructured so that Mazda and Changan Auto will each hold a 47.5% stake in Changan Mazda, and FAW will hold the remaining 5%. The new Changan Mazda will also own 60% of FAW Mazda, with plans to eventually acquire the other 40% from Mazda to turn FAW Mazda into a wholly owned subsidiary.

Changan Mazda and FAW Mazda will remain separate businesses for now, Mazda said. But they are expected to streamline their operations, and could also curtail their product lineup and merge their sales networks.

This story was first published in Nikkei Asia.

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