Chinese government approves split of Changan Ford Mazda joint-venture image

Ford, Mazda and their Chinese partner Changan announced on Friday that they had obtained final approval from the Chinese government to split their joint venture.

The three companies had a three-way manufacturing and sales joint venture which can now by split into two following the government’s approval. Changan Ford Mazda Automobile Co (CFMA) will therefore break into two 50-50 joint ventures, the three partners announced. Changan will be in one venture with Ford and in the other with Mazda.

Changan Ford, based in the southwestern city of Chongqing, will inherit all of CFMA’s Ford-related business, including development, manufacturing, marketing and sales of Ford-branded vehicles in China. In its turn, Changan Mazda, which will be based in the eastern city of Nanjing, will assume all of CFMA’s Mazda-related business.

Ford, Mazda and Changan said their partnership “will continue at a strategic level, in areas of benefit to all parties.” The three companies did not provide further details.

According to executives involved in the former CFMA joint-venture cited by Reuters, the split was partly due to Ford’s decision in 2008 to raise money by reducing its controlling stake in Mazda to 13 percent from 33 percent. Later Ford further reduced its stake in the Japanese automaker to 3 percent.