Ford Motor Co (F.N) and Mazda Motor Corp (7261.T) and their local Chinese partner, Changan Automobile Co Ltd (000625.SZ), said on Friday that they had obtained final approval from the Chinese government to split their three-way manufacturing and sales joint venture into two.
Starting immediately, Changan Ford Mazda Automobile Co (CFMA) will break into two 50-50 joint ventures, the partners said in a statement. Changan will be in one venture with Ford and in the other with Mazda.
Changan Ford, the going concern in the southwestern Chinese city of Chongqing, will assume all of CFMA's Ford-related business, including development, manufacturing, marketing and sales of Ford-branded vehicles in China, while Changan Mazda, to be incorporated in the eastern city of Nanjing, will assume all of CFMA's Mazda-related business, the companies said.
The three companies, which had previously submitted the restructuring plan to local and central government officials, said their partnership "will continue at a strategic level, in areas of benefit to all parties." They did not provide details on those areas.
Executives close to the three-way joint venture previously said the split stemmed partly from Ford's decision in 2008 to raise money by reducing its controlling stake in Mazda to 13 percent from one-third. The U.S. automaker later further reduced its Mazda stake, which is now less than 3 percent.
Ford and Mazda had said they were seeking more freedom to boost their presence individually in China, which in 2009 surpassed the United States as the world's largest auto market.
(Reporting by Ben Klayman in Detroit; Editing by Lisa Von Ahn)