MAZDA NEWSROOM｜ Mazda Establishes New Company to Manage China Operations

NEWS RELEASES

March 7, 2005

Mazda Establishes New Company to Manage China Operations
- First wholly-owned subsidiary in growing Chinese market -

SHANGHAI--Mazda Motor Corporation today announced the establishment of its new company, created to integrate its expanding business operations in China. Located in Shanghai’s Pudong Xin business district, the new company--Mazda Motor (Shanghai) Business Management & Consulting Co., Ltd, more commonly referred to as Mazda China Operations or “MCO”--is the first company owned one hundred percent by Mazda in this key market. Initial capital funding is $USD 7.5 million, with plans for added investment after a technical support center is established in Shanghai this summer. Business operations for the new company will begin in late March. Initial staffing is projected to be around 70-80 employees by the end of this year.

Kiyoshi Ozaki, Director and Senior Executive Officer at Mazda in charge of China business, was appointed Chairman of the Board. Satoshi Tachikake, General Manager of Mazda’s China Business Division, became President and CEO of the new company.

Mazda has set a mid-term goal to construct a system able to produce and sell 300,000 vehicles in the Chinese market by 2010. To realize these goals, Mazda announced on January 7, 2005, that it would participate in Changan Ford’s project to build a new manufacturing plant in Nanjing. To strengthen its sales network in China, Mazda also revealed plans for a joint venture sales company--FAW Mazda Motor Sales Co., Ltd. (FMSC)--with the First Auto Works (FAW) group on January 17. Over the next two to three years, Mazda plans to launch eight vehicle models into the Chinese market to bolster its product lineup.

The new subsidiary, Mazda Motor (Shanghai) Business Management & Consulting Co.--or MCO--will be its regional headquarters and coordinate all facets of business development.

The new company will:

(1)	Support the new joint venture sales distribution company and Mazda production bases in China
(2)	Rapidly adjust product policy based on analysis of market complaints and accurately reflect customer needs in future products through market research
(3)	Increase Mazda brand awareness through public relations and other initiatives
(4)	Coordinate activities and interact with Mazda partners Ford/ChanganFord, FAW group and other stakeholders

“Mazda is accelerating the expansion of its manufacturing base and strengthening its sales network to achieve our mid-term goals in the booming China market,” said Kiyoshi Ozaki, Director and Senior Managing Executive Officer. “Locating the new company in Shanghai means we can implement decision making rapidly and efficiently for our facilities in Nanjing, Changchun and Hainan. It will demonstrate the linkage between our business practices and attaining maximum results in this key market,” he added.

Additionally, Ozaki said, “Satoshi Tachikake was appointed MCO’s President and CEO. He has my every confidence in his leadership for our China business. He brings a wealth of production experience in wide areas of stamping, body, assembly and engine manufacture at the Hiroshima headquarters as well as from his experience as General Manager of the Hofu Plant. Tachikake also has international business experience gained at the Auto Alliance International plant in Flat Rock, Michigan, USA.”

Mazda’s production and sales have demonstrated strong growth since full-scale operations in the Chinese market began in May 2001. The company sold 80,075 units in 2003 (up 248 percent from the previous year) and in 2004 the sales volume grew to 97,132 units--up 21 percent. Mazda has posted sales volume increases that exceed total passenger vehicle market demand figures in China for three years running, despite tough market competition.

Attachment

[Company Outline]

Company Name:

Mazda Motor (Shanghai) Business Management & Consulting Co., Ltd

Type:

“Management company”

Location:

07-12, 20F, Shanghai Information Tower 211 Century Ave. Pudong Shanghai China 200120

Capital:

$USD 7.5 million

Officers:

Chairman of the Board	Kiyoshi Ozaki Director & Senior Managing Executive Officer Mazda Motor Corporation
President & CEO	Satoshi Tachikake Executive Officer President, Mazda Motor (Shanghai) Business Management & Consulting Co., Ltd.; General Manager, China Business Division
Directors	John G. Parker Representative Director & Executive Vice President Takashi Furutama General Manager, China Finance Department China Business Division Akira Tanioka General Manager, China Engineering Support Department China Business Division

Business activity:

Provision of various services to Mazda Motor Corporation’s affiliated companies

(Note) In Shanghai and Beijing the policy of attracting "local headquarters" (regional headquarters) of multinational companies is continuing, and this is the company form that the City of Shanghai approved. Mazda chose "management company" instead of “holding company” according to Shanghai City’s policy because there are national regulations pertaining to holding companies. Mazda’s new company will provide various services such as sending out management strategy directives, providing information, employee training and direction, technical support for the local companies in China that Mazda Motor Corporation has invested in.

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