Mazda to expand China operation

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Last updated at: (Beijing Time) Monday, January 05, 2004

Mazda to expand China operation

Major Japanese automaker Mazda Motor Corp. is hoping to grab 5 percent of China's rapidly growing car market by setting up a sales holding company and production firm.

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Major Japanese automaker Mazda Motor Corp. is hoping to grab 5 percent of China's rapidly growing car market by setting up a sales holding company and production firm.

Mazda, owned 33.3 percent by U.S. auto giant Ford Motor, is projecting the production and sale of 200,000 vehicles in China by 2007, raising its market share from three percent, according to Nihon Keizai Shimbun report Saturday.

The sales holding company would oversee sales of three passenger vehicles produced by FAW Car Co. and FAW Hainan Motor Co., subsidiaries of Mazda's partner the First Auto Work Group Corp., the newspaper said.

It will also oversee sales of locally manufactured Mazda vehicles.

"The arrangement will improve the product line of Mazda dealerships in China helping boost sales," the business daily said.

Mazda and Ford will begin joint production of vehicles by 2007, the Nihon Keizai said, adding that further details of the production firm have not been decided.

Mazda and Ford, however, are likely each to take a 25 percent stake in the firm, with Chongqing Changan Automobile Co., a Ford production partner in China, contributing the remaining capital, the newspaper said.

A production plant with an annual output capacity of 200,000 units will be built near Shanghai at a total cost of about US$467.3 million, the report said.

Mazda would produce 100,000 units of the successor to its popular subcompact Demio, and the remaining output would be allocated to Ford subcompacts, it said.

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