The ball of Ford and Mazda is lingering in the Court of China Government image

The issue of Ford and Mazda to have a break up in 3 way tie up is still lingering as the Chinese Authorities have not commented yet on the request of both these companies. Recently, the Ford and Mazda have asked China officials to allow them to break the 3 way tie up and to have the 2 way tie up individually.

At present, the Ford Motor Co. is having partnership with Mazda Motor Corp. and the Chinese local partner Chongqing Changan Automobile Co. But now, both the Multinational Companies are willing to get separate from each other and to get tied up with the Chinese Company Changan individually so that they can frame their own policies to deal in Chinese markets. Basically both the parties are seeking better leeway and freedom to have the strategically changed approach for China. The roots of this split ups are in 2008 when Ford reduced their controlling stake of 33 percent to just 13 percent to free up the liquidity that was the urgent needs of those days for this American giants.

Right now, this 3 way partnership is having quite odd structure as Ford owns 35 percent of the stake, Changan 50 percent and Mazda just 15 percent. If the China Government allows this break up then Mazda would be the most beneficiary of this break up as both the companies are planning to have 50-50 partnership with Changan. The Ford Company has proposed their plants at Chongqing and Mazda’s plant will be at Nanjing.

This 3 way tie up took place in 2006 when Mazda joined Ford and they both made up plan to have the best possible deal with the local automotive King Chongqing Changan Automobile Co. but unfortunately they could not reach to the plans together and ultimately found that “to have a divorce” from the 3 way tie up is the best solution. Their application is being reached to Chinese authorities but the Government has reached to no decision and none of the officer is ready to comment anything on this topic. So, the ball of Ford and Mazda is lingering in the Chinese Government Court!!