Weaker ties with Ford seen as boon, risk for Mazda

Mazda Motor Corp (7261.T) may gain a freer hand to make decisions if Ford Motor Co (F.N) cuts its ownership share, though the Japanese automaker may want to seek another partner eventually.

Ford, once the controlling shareholder in Mazda, plans to sell most of its remaining 11 percent stake in Mazda, a source with knowledge of the matter told Reuters on Saturday. Trading house Sumitomo Corp (8053.T) and other Japanese business partners of Mazda were in talks to buy the shares, the source said.

Sumitomo Mitsui Banking Corp, the core unit of Sumitomo Mitsui Financial Group Inc (8316.T), was considering a purchase of part of Ford's Mazda stake by year's end, President Masayuki Oku said.

Oku told reporters Ford was not planning to sell its Mazda stake because it needed cash, as some media reported, but for other reasons that could not be disclosed.

"If we become Mazda's top shareholder, the operational and psychological relationship between Ford and Mazda will not change," Oku said.

He also said the bank did not intend to sell any stake it buys in Mazda to other automakers.

Ford said in a statement that it continued to work with Mazda in areas of mutual interest and offered no comment on what it called "speculation" about its Mazda holdings.

Mazda made a similar statement.

Sources said Ford was looking to sell its Mazda stake to gain more freedom for its Chinese operations. Ford, Mazda and Chongqing Changan Automobile Co Ltd (000625.SZ) are seeking Chinese government approval to split their three-way partnership into two, with Ford and Mazda each partnering with Changan separately.

"It sounds like Ford decided to cut its ties with Mazda, and it would rather nurture its Chinese venture businesses," said Fumiyuki Nakanishi, a manager at SMBC Friend Securities.

IHS Automotive analyst Aaron Bragman said on Monday it would not be a surprise if Ford distances itself from Mazda, given its plan to work on small-vehicle development in-house.

"Mazda needs Ford a lot more than Ford needs Mazda," Bragman said.

"They (Ford management) will focus more on Ford than in the partnerships they have. They have the resources, they have the people to do it without an outside partner."

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