Mazda Motor to build up presence in China

Mazda Motor Corporation, one of the world's top automakers, was lately permitted to inject more capital into its China joint venture, FAW Mazda Motor Sales Co., Ltd., for the sake of further expansion in such a market with high growth potential.

As early as March 2005, FAW Car Co., Ltd., Mazda Motor, and China FAW Group Corporation (CFA) co-founded FAW Mazda Motor Sales, taking a stake of 70%, 25%, and 5%, respectively.

The JV kept a fast and stable growth in recent years, so Mazda Motor decided to make an additional investment two years ago. At the end of March 2009, related authorities allowed the foreign shareholder to additionally pour 49.5 million yuan into FAW Mazda Motor Sales.

After this deal, total capital base of the JV will enlarge to 125 million yuan from 100 million yuan. In addition, FAW Car, CFA, and Mazda Motor will separately hold 56%, 40%, and 4% of FAW Mazda Motor Sales, said people with the direct knowledge of the matter.

The Mazda-branded vehicles have been salable in China for six consecutive years. In the entire 2008, total vehicle sales of the carmaker hiked 25.5% from a year ago, far more than the average growth of around 7% in the Chinese passenger car market, in spite of the global economic recession.

In the first quarter of this year, Mazda Motor aggregately sold 37,217 vehicles in China, jumping more than 22% from the prior year and hitting a record high in history. And this cheerful performance benefited from the reduction of taxes on buying low-displacement vehicles.

Upon its latest layout and development strategy, total number of the Mazda 4S distributors directly controlled by both FAW Mazda Motor Sales and Chang'an Mazda Motor Sales will foot up to 250 before the 2009-end.

Located in the northeastern Chinese city of Changchun, Shenyang Province, FAW Mazda Motor Sales has opened 127 Mazda distribution and services stores in 76 cities across China. In the coming several years, it will strive for annual sales of more than 300,000 vehicles.

On April 9, 2007, Mazda Motor established another China JV, Chang'an Mazda Motor Sales, together with Ford Motor and ChangAn Group. Presently, the new incorporation is responsible for image promotion, marketing, and sales network construction of Mazda2 and Mazda3.

Previously, Mazda Motor spared no effort to balance these two marketing channels, in an attempt to further sharpen its competitive edge.