Strife between FAW and Changan intensifies as Mazda 8 rolls off assembly line
- Source: Global Times
- [11:25 December 02 2010]
- Comments
Joint Venture, the match point?
Industry insiders believe that the competition of products between FAW-Mazda and Changan-Mazda is actually a direct combat between FAW and Changan Auto.
"Whoever grasps the lead of new products will occupy the market," an insider said.
As US Ford reduced its market share in Mazda to 3.5 percent, the company is free to form two joint ventures in China.
According to Noriaki Yamada, executive director of Mazda, the company has made a five-year plan to sell 1,7 million units by 2015; 400,000 of which will be sold in China -25 percent of Mazda's global market share.
Yamada said the company will enrich the variety of its products to meet Chinese customers' needs and create more opportunities to cooperate with Chinese companies.
Faced with the chance, both FAW and Changan Auto are trying to establish joint ventures with Mazda.
It is reported that Changan Auto and Mazda are presently awaiting for necessary approval from the National Development and Reform Commission, Ministry of Commerce of China and State Administration for Industry and Commerce of China for the establishment of a joint venture.
Meanwhile, rumor has it that FAW is also considering to found a joint venture with Mazda, however Zhang refused to comment on the issue, saying that as long as the two companies can realize a win-win situation, the cooperation mode could be flexible.
Ye Sheng, deputy director of auto research center Ipsos, said that if Changan Auto sets up a joint venture with Mazda ahead of FAW, Changan will have more advantages in introducing new models.
Since Mazda only has 4 percent of FAW's market share, FAW's profits and control will decline if the market share of the joint venture is divided in half.
