Mazda cuts China output as inventories rise

Japan's Mazda Motor Co said on Thursday it is cutting back production in China after slower-than-expected sales of its compact cars swelled inventories.

But the company is not officially altering its goal of selling 180,000 cars in China in the business year ending on March 31, 2009, a Mazda spokeswoman said.

Mazda Motor, partly owned by Ford Motor Co, is reducing production of the Mazda3/Axela and the Mazda2/Demio at its two China plants by a combined total of slightly more than 5,000 units, over a two-month period to September, a company spokeswoman said.

Mazda's current inventories are around three months' sales and the output reduction should bring them back to a healthy level, she said.

Car sales growth in China, the world's second-largest auto market, slowed to 17.07 percent in the first half after a rise of 20 percent or more annually since 2005. But most foreign automakers managed to beat the overall market's rate of growth during the period.

Ford, which makes cars in China via a three-way tie-up with Mazda and Chongqing Changan Automobile Co, said it had no plans to cut its China output.

Representatives at General Motors, Toyota Motor and Honda Motor also said they were not trimming production in China.