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Changan Mazda to introduce new investor by offering up to 5% stake

Monika From Gasgoo| June 22 , 2021 12:36 BJT

Shanghai (Gasgoo)- Changan Mazda, a 50:50 joint venture between Changan Automobile and Mazda, is trying to raise money by soliciting an eligible investor. According to China Beijing Equity Exchange (CBEX), the funds raised will be used to help the company improve its management quality, perfect its industrial deployment, and enhance its competitiveness.

Changan Mazda to introduce new investor by offering up to 5% stake

Mazda3 Axela; photo credit: Changan Mazda

Upon completion of the capital increase, the new shareholder will hold no more than 5% of equity interests in Changan Mazda and the joint venture's registered capital would be increased by $5.84 million, according to CBEX.

Changan Mazda was posting slide in net profit during the past two years. To be specific, its net profit amounted to 1.87 billion yuan ($289.454 million) and 1.476 billion yuan ($228.389 million), dropping 25.96% and 21.12% year on year respectively.

As for sales, the joint venture delivered 136,334 new vehicles in 2019, posting a year-over-year decrease of 16.8%, while the annual deliveries inched up 0.24% to 136,667 units in 2020, according to Mazda Motor (China) Co., Ltd.

Despite the net profit fall and tepid sales growth, Changan Mazda still outperformed FAW-Mazda. Last year, Mazda’s China retail sales reached 214,575 units, only 77,908 units (-14.78% YoY) were from the joint venture with FAW Group.

A local media channel reported in April that FAW Group, Mazda and Changan Automobile were in talks with the attempt to make the business of FAW Mazda Motor Sales Co. Ltd. (FMSC) merge with that of Changan Mazda.

Aside from the combination on the level of dealership, the production of vehicle models like the Atenza would be taken over by Changan Mazda as well, and the restructuring was expected to be finished before June 2021, said the media channel, citing sources briefed on the matter.

After being reached for comment, FMSC said it had not received any relevant information yet, while Changan Mazda said it had still been unaware of this matter.

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