Japan:Mazda, FAW Car to set up $12 million China sales venture
Mazda, FAW Car to set up $12 million China sales venture
TOKYO -- Mazda Motor Corp. 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 Co. will be capitalized at 100 million yuan ($12 million). Mazda will own 25 percent, FAW Car Co. Ltd., a unit of China's largest auto maker First Automotive Works (FAW), will own 70 percent and FAW 5 percent.
The venture is the latest push by Mazda, one-third owned by Ford Motor Co., into China, and follows its announcement earlier this month that it, Ford and China's Changan Automobile Co. have received government approval for a new assembly plant in Nanjing, near China's richest city of Shanghai.
Mazda sold about 97,000 vehicles in China in 2004, up 21 percent from a year earlier, and is targeting sales of 300,000 annually by 2010. Total car sales in China rose 15.17 percent in 2004 to 2.33 million units.
Sales of new vehicles in Japan are expected to remain sluggish this year after inching up 0.4 percent in 2004, leading most Japanese automakers to look for growth abroad. China is one of the hottest overseas markets.
Toyota Motor Corp., 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 Co. Ltd. is also revving up its Chinese operations through a joint venture with Hong Kong-listed Denway Motors Ltd.
Guangzhou Honda, in which Honda has a 50 percent stake, will invest 2.1 billion yuan in 2005 to boost production capacity in China, and plans to sell 15 percent more vehicles than last year.
KEEPING UP WITH THE HONDAS
Analysts said Mazda's move will help it keep pace.
"With Toyota, Honda and other major rivals stepping up their offensive, Mazda was in danger of sharply losing its share in what is an important market," said an analyst at a Japanese brokerage.
"The joint venture is the first step for Mazda to expand its production plans there in cooperation with its parent Ford," he said.
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 FAW Car Co.'s 78 outlets.
"This joint venture is a very significant step forward for Mazda's expansion of its production base in China and is one of our major strategies to achieve our targets," Kiyoshi Ozaki, Mazda's director, said in a statement.
Mazda said the joint venture, to be headquartered in Changchun, northeast China, will start operating in March.
"Through a Mazda-led unified sales network, we hope to provide sufficient services to our customers and to improve our brand image," said executive officer Satoshi Tachikake, who is in charge of Mazda's Chinese operations.
"The size of our stake is not our main concern here because we will appoint the president of the new company and our know-how will be reflected in the new company's operations," he said.
For the FAW group, the move will enhance its competitiveness in the mid-size and compact-passenger vehicle market in China, FAW's vice president An Dewu said in a statement.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....