Ford, Mazda aim to break up 3-way venture in China

Ford Motor and its China venture partners, Mazda Motor Corp and Chongqing Changan Automobile Co, are seeking Chinese government approval to end their three-way tie up, two sources said on Thursday.

Ford and Mazda both plan to set up their own separate joint ventures with Changan, a move which will give the automakers more leeway to design their own China strategies, the sources with direct knowledge of the scheme told Reuters.

Ford is set to own half of its new two-way venture with Changan, the sources said, while the Mazda-Changan tie-up will probably also be a 50-50 JV.

"They have submitted a joint proposal to the Chinese government to split up the partnership. Ford's new JV with Changan will be based in Chongqing, while Mazda's venture will be based in Nanjing," said one of the sources, adding that it was unclear when the government was expected to make a decision.

Ford and Changan declined to comment on the issue. A Mazda China spokeswoman had told Reuters the parties were awaiting regulatory approval for a restructuring move, but declined to give further details.

Auto industry partnerships have been in focus recently, with Renault, Nissan and Daimler announcing a stake swap deal in the wake of an equity tie between Suzuki Motors and Volkswagen AG.

Mazda's ties with Ford have weakened since the U.S. automaker reduced its controlling one-third stake in Mazda to 13 percent in 2008 to free up cash. Ford currently owns about 11 percent of Mazda, Japan's No.5 automaker.

Ford, which broke ground for its $490 million third China plant in September last year, owns a 35 percent stake in the venture, with Changan holding 50 percent.