HIROSHIMA, Japan—Mazda Motor Corporation has increased its capital investment in FAW Mazda Motor Sales Co. Ltd. (FMSC), a distributor of Mazda brand vehicles in China, raising its stake in the company from 25 to 40 percent. FMSC is a joint venture between Mazda, First Auto Works (FAW) and FAW Car Co., Ltd. (FCC).
The larger stake is in line with business growth at FMSC over the past few years. Mazda decided to review its investment in order to help expand FMSC’s sales network and sales volume. Mazda invested 49.5 million yuan (710 million yen) through a third-party allocation of shares, which raised FMSC’s capital base from 100 million yuan to 125 million yuan. The investment stake of the individual partners, FAW, FCC, and Mazda, changed from 5 percent, 70 percent, and 25 percent, respectively, to 4 percent, 56 percent, and 40 percent. Of Mazda’s 49.5 million yuan total investment, 25 million yuan was allocated to the capital base and the remainder to capital surplus.
Together with its local partners, the FAW Group, Changan Automobile and Ford Motor Company, Mazda has been expanding its business in China. Mazda’s China production of the Mazda6 (known as the Mazda Atenza in Japan) began at FCC in March 2003. FMSC was established in March 2005, and currently sells the Mazda6, Mazda5 (Mazda Premacy), Mazda3 five-door hatchback (Mazda Axela Sport) and Mazda RX-8. This product line will be strengthened with the upcoming launch of the Mazda6 Ruiyi. FMSC’s sales network has expanded to 125 dealerships from the initial 78, as of the end of March 2009. The sales network will increase to over 140 dealerships by the end of 2009.
The Mazda3 sedan (Mazda Axela) and Mazda2 (Demio) are sold in China through the Changan Mazda (CAM) dealer network. Both models are produced in China by Changan Ford Mazda Automobile Co., Ltd. — the Mazda3 sedan at the Chongqing Plant and the Mazda2 at the Nanjing Plant. The CAM sales network expanded from 52 dealerships in January 2008, to 96 at the end of March 2009, and is expected to exceed 110 dealerships by the end of 2009.
Mazda aims to grow its business in China through a strengthened sales network, an expanded product lineup, and stronger relationships with the FAW Group, Changan Automobile and Ford.