Mazda combines ventures with China partners to deal with sales decline

Mazda Motor is set to merge its two major joint ventures in China, the automaker announced Tuesday, paving the way toward streamlining operations and recovering its declining sales in China.

The automaker’s new car sales in China have dropped every year since peaking out at about 310,000 vehicles in 2017, reaching about 210,000 in 2020.

January-July sales saw a drop of 4% on the year.

In an effort to combat the decline, the automaker will unite its operations in the country, currently divided between its joint ventures with FAW and Chongqing Changan Automobile.

Mazda has a 40% stake in FAW Mazda Motor Sales, with the rest of the stake held by FAW, and an equally held 50% stake in Changan Mazda Automobile.

The capital stakes will be remodified so that Mazda and Changan Auto will each hold a 47.5% stake in Changan Mazda, and FAW will hold the rest of the 5% stake.

The new Changan Mazda is also set to own 60% of FAW Mazda, with plans to eventually control the other 40% from Mazda to turn FAW Mazda into a wholly-owned subsidiary.

For now, Changan Mazda and FAW Mazda will remain separate businesses, according to Mazda. But they are expected to streamline their operations, and could also cut down their product lineup and merge their sales networks.