Changan Mazda, FAW Mazda rumored to merge soon

Shanghai (Gasgoo)- Mazda Motor's two Chinese joint ventures will soon announce merger of their businesses and combine sales channels in September, according to a local media outlet, citing a source at a Changan Mazda 4S shop.

Another source told the media channel that the merger of FAW-Mazda and Changan Mazda will be completed at the end of this year. Currently, FAW Mazda locates its production workers at FAW Group's Weishan plant in Changchun, and over 100 salespersons will be transferred to FAW Group.

Mazda3 Axela; photo credit: Changan Mazda

According to China Beijing Equity Exchange (CBEX), Changan Mazda is trying to raise money by soliciting an eligible investor. The funds raised will be used to help the company improve its management quality, perfect its industrial deployment, and enhance its competitiveness.

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.

Some industry insiders speculated that Changan Mazda may intend to pave the way for the merger with FAW Mazda's business through the capital increase.

In early April, another local media outlet reported that Mazda was in talks with partners China FAW Group and Chongqing Changan Automobile to make FAW Mazda Motor Sales Co.,Ltd. (FMSC)'s Mazda-related business merge into Changan Mazda, which is half owned by Changan Auto.

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.