Ford to Sell Mazda?

Posted by: Ian Rowley on October 11, 2008

Back in August, I wrote a piece asking if Ford’s woes would mean that it might have to sell off its stake in Mazda. According to reports today in Japan, what was once unthinkable is now on the cards. Today, both Kyodo News and the Nikkei report that Ford is preparing to sell its stake in the Japanese company. The latter reports a Mazda executive has admitted that Ford is considering selling its one-third stake.

One possibility is that Japanese trading company Sumitomo Corp. will acquire the shares. Another possibility is that Tata Motors could make a bid, notes the Nikkei. Separately, Mazda issued a statemennt neither denying or confirming the reports. “We have not announced anything, and nothing has been decided. We have nothing to disclose,” the company noted.

Previously, most analysts believed Ford would cling on to Mazda if at all possible. Even if Ford does sell its stake, it’s unlikely the two would unwind what has been a hugely successful alliance. In addition to jointly operating auto plants in Michigan, Thailand, and China and sharing personnel, Ford and Mazda collaborate on research and development. Over half of the passenger cars developed at Mazda’s Hiroshima R&D hub will end up badged as Fords, says Hirofumi Yokoi, an analyst at consultants CSM Worldwide in Tokyo. That’s up from 14.8% in 2000 and 42% today, as Mazda’s role within the alliance flourishes. Credit Suisse, meanwhile, estimates that Mazda saves over $90 million a year by sharing development costs with Ford. The benefits to Ford, it says, are likely several times greater. If today’s reports are correct, desperate times are forcing desperate measures.

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Reader Comments

Aaron

October 12, 2008 07:06 PM

Mazda is a huge part of Ford, much more then most consumers know. If Ford does this, they are in for some trouble.

TK

October 15, 2008 08:12 PM

Mazda's today's success won't happen without Ford. Ford re-structured Mazda's organization system, product concept and been guiding their corporate vision whitch made them world success. Japanese couldn't do it by themself
(Nissan saved by a French). Now its time , Mazda to pay it back to Ford.
That's Japanese way to show respect to partner.

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Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.

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