Mazda, Ford to Separate

Mazda Motor Corp., 11-percent owned by Ford Motor Co., is revealed to move the Chinese production of its Mazda 3 model to Nanjing from Chongqing in May. The companies are looking forward to dissolving their joint venture in China by 2012, a move that would further weaken the tie between the two automakers, Japan's Nikkei business daily reported on Sunday.

Mazda, Ford and China's Chongqing Changan Automobile Co have basically agreed to split their three-way tie-up, Changan Ford Mazda, into two entities, Nikkei reported, citing sources.

The business paper revealed that the three are speculated to spin off the joint venture's factory in Nanjing as a 50-50 joint venture between Mazda and Changan Automobile Group, while Ford and Changan will run the venture's other factory in Chongqing.

The reduction in stake from 66% to 13% in 2008 by the cash-strapped U.S. automaker has cropped weakness in the relation between Mazda and Ford. However, Mazda will stick to its joint production with Ford in the United States and Thailand for the time being.

Mazda sales in China reports around 70,000 cars in the two factories in 2009 and the automaker plans to expand the capacity of the Nanjing plant to 200,000 units per year from a current 160,000, the Nikkei reported.