FAW talks with Ford to buy into Changan Ford Mazda

Shanghai, May 7 (Gasgoo.com) FAW Car is in talk with Ford to buy into or acquire the production line of Changan Ford Mazda, an insider close to FAW's top management said recently to the 21st Century Business Herald.

"Ford Motor holds 33% share of Mazda Motor. Ford and FAW have been in close contact," the sources said. Currently the two carmakers have reached an initial agreement, and FAW is applying for the approval from the central government and expect the government's regulatory body to okay this deal.

FAW and Ford's partner Mazda also have a joint venture (JV), and their JV's sales company FAW Mazda Motor Sales Co. has met some discord from Changan Mazda over the sales rights of the Mazda-3 vehicles. The results of contact and talk between FAW and Ford will surely influence the interests of Mazda (China) and Changan Group. The sales profits of Mazda cars in the fast growing Chinese auto market are likely to be more controlled by FAW Mazda if the FAW-Ford deal takes effect.

Mazda Motor has attempted to coordinate the sales relationship between its three joint ventures in mainland China: Hainan Mazda, FAW Mazda, and Changan Mazda, and tried in vain to put all the Mazda sales in China into the network of FAW Mazda Motor Sales Co., but the effort to centralize its control of China's Mazda sales in FAW is still going on, despite an additional objection from Hainan Mazda.

The three Chinese JVs of Mazda produce more than car models of different segments, including sedans, SUVs, and MPVs. But their sales relation remains a big problem for Mazda Motor to solve, and now FAW has to win more control of those JVs by buying into Changan Ford Mazda.