Mazda To Set Up Sales JV In China
Japan’s Mazda Motor said on Monday it will form a sales joint venture in China with its local partner, a further step in its efforts to boost its share in the world’s third-largest car market. The venture, FAW Mazda Motor Sales will be capitalised at 100m yuan ($12m). Mazda will own 25%, FAW Car (FCC), a unit of China’ largest auto maker First Automotive Works (FAW), will own 70% and FAW 5%.
The venture is the latest push by Mazda, one-third owned by Ford Motor, into China, and follows its announcement earlier this month that it, Ford and China’s Changan Automobile have received government approval for a new assembly plant in Nanjing, near China’s richest city of Shanghai.
Among foreign auto manufacturers in China, Ford has been playing catch-up with GM and Volkswagen, which are both partners of SAIC, China's largest auto maker.
Mazda sold about 97,000 vehicles in China in 2004, up 21% from a year earlier, and is targeting sales of 300,000 annually by 2010. Total car sales in China rose 15.2% in 2004 to 2.3m units.
Sales of new vehicles in Japan are expected to remain sluggish this year after inching up 0.4% in ’04, leading most Japanese auto makers to look for growth abroad. China is one of the hottest overseas markets.
Toyota Motor, which will start producing its Prius sedans in China this year with FAW Group, is set to begin offering auto financing services in China, hoping to spur further growth in the market.
Honda Motor is also revving up its Chinese operations through a joint venture with Hong Kong-listed Denway Motors. It manufactures Honda-branded vehicles at a Honda plant in Guangzhou in southern China.
Guangzhou Honda, in which Honda has a 50% stake, will invest 2.1bn yuan in ’05 to boost production capacity in China, and plans to sell 15% more vehicles than last year.
While Mazda vehicles have been praised for their performance and quality, the company has had difficulties expanding from a niche player.
The new company will have exclusive rights to sell Mazda-brand cars to be made in the future in China, as well as the Mazda6 sedan which is already on sale through FCC’s 78 outlets.
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