Mazda And Ford Divorce In China

Bertel Schmitt
by Bertel Schmitt

Divorce Sunday: Mazda and Ford will dissolve their joint venture partnership in China by 2012, The Nikkei [sub] writes.

The Chang’an Ford Mazda Automobile Co. has been producing cars since 2006. The JV is 50 percent owned by Chang’an, 35 percent by Ford and 15 percent by Mazda.

The joint venture has two plants, one in Chongqing and the other in Nanjing. And that’s how they’ll divide the property: The Nanjing business will become a 50-50 unit of Mazda and Chang’an. The Chongqing operations will be a joint unit of Ford and Chang’an. Mazda’s Axela, which is currently made in Chongqing, will be made in Nanjing. The Nanjing plant has annual output capacity of 160,000 units; which Mazda wants to expand to 200,000 units.

Stating the obvious, the Nikkei says: “The planned move, coming on the heels of Ford unloading some of its Mazda stock in 2008, will further weaken ties between the two automakers.”

Soon, there will be another decision to be made. What happens with the Volvo/Chang’an joint venture when Volvo is owned by Geely? Chang’an Ford Mazda produces the Volvo S40 and the Volvo S80. With the JV dissolved, what will happen to the cars? Says Shanghai Daily: “To complicate things, Volvo’s current OEM arrangement with Chang An Automobile needs to be bought out, and the relationship with its existing sales network of 4S stores needs to be straightened out. Chang’an’s OEM contracts for Volvo S40 and S80 are not going to expire until 2015 and 2018, respectively.”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Dimwit Dimwit on Jan 17, 2010

    Given the forward thinking of Mulally I wouldn't be surprised that this will be another bold move. Don't forget that the Chinese gov't wants to remove brands and companies like crazy, leaving only 8 from the 100 right now. They might dump Chang'an altogether. Bertel, do you know how many JV's Ford is into in China?

    • Bertel Schmitt Bertel Schmitt on Jan 17, 2010

      Bertel, do you know how many JV’s Ford is into in China?

      AFAIK, one. With Chang'an

  • Iamwho2k Iamwho2k on Jan 17, 2010

    While I agree that Ford is better off with Mazda and Volvo attached to the hip, it seems that Mazda is planning for a life independent of any umbilical cords. Of course, I don't understand why Mazda would transfer to the China plant that's not making the Axela --or why Ford would agree to that as well. Unless that current plant is not capable of further expansion?

  • Mtypex Mtypex on Jan 17, 2010

    I think the Lincoln vs. Volvo question for China depends on how nationalistic and pro-American the Chinese really are, which of course is the ten trillion dollar question. You would think that the young, urban Chinese would prefer Volvos, but I can't put numbers to that.

  • Rusted Source Rusted Source on Jan 18, 2010

    Times a' Chang'an.