Chang'an and FAW clenched their hands in the third hole of Mazda in China
In a recent report, journalist Zhang Huozhaohu in Beijing highlighted that the deep collaboration between Ford and Changan has reignited Mazda’s ambitions as a sub-brand under the Ford umbrella. Initial rumors suggested that the new Mazda3 might be produced in Nanjing, while some analysts believed that Mazda would focus on expanding its operations in Hainan and Jilin. However, recent developments have shown that Mazda's plans are even more ambitious than previously thought.
On July 18th, FAW Hainan Mazda officially launched 150,000 hippocampus plants, marking a significant step forward in their production strategy. Just a few days later, on the 22nd, Jingju Kuiichi, representing Mazda as a Ford subsidiary, attended the signing ceremony for the official investment agreement of Changan Ford Nanjing No. 2 Factory. These events revealed a broader vision for Mazda’s growth in China, with Changchun, Haikou, and Nanjing all playing key roles. With Changan and FAW as its joint venture partners, Mazda is firmly positioning itself in the Chinese market.
Unlike traditional Japanese automakers, which often approach foreign investments with caution, Mazda seems to be moving at a faster pace. For instance, Honda initially invested only a few thousand units in India, while Toyota first established a joint venture with GM before building a separate plant in Kentucky. In China, Toyota's first plant had a capacity of just 30,000 units. In contrast, Mazda’s recent actions suggest a more aggressive strategy.
According to industry insiders, the newly formed FAW Haima Company will continue to strengthen its partnership with Mazda in Japan while also developing its own brand in line with new industrial policies. The goal is to establish a 150,000-unit passenger car production and sales system within 3 to 5 years. Following the official launch of FAW Hainan Mazda, Hainan Province held an economic meeting where officials emphasized auto manufacturing as one of the province's four key industries.
Mazda's decision to invest in the second factory of Changan Ford in Nanjing is driven by the strategic advantages of the location. Nanjing is close to Shanghai, with direct access to Wusongkou port, and is near Baosteel, providing cost-effective access to raw materials. Additionally, Shanghai and Kunshan serve as major distribution centers for automotive parts, offering significant cost savings.
Logistically, Nanjing offers a clear advantage over Chongqing, reducing transportation time by more than a week. This benefit allows Mazda to better meet the demands of Chinese consumers, who prefer new foreign brands that are both affordable and competitive with imported models. To achieve this, Mazda must minimize the costs associated with importing components.
The new industrial policy also plays a role in Mazda’s decision-making. As part of the Ford Alliance, Mazda can only partner with Ford’s existing joint ventures in passenger vehicles. Since Ford chose Changan, Mazda is now aligned with them in the passenger car segment. At the event in Nanjing, Mazda President Ikegami Ikuro emphasized that the purchase of land by Changan Ford was a crucial step for Mazda’s expansion in China.
Ford also praised the partnership, highlighting it as a mutually beneficial extension of their collaboration across North America, Europe, Asia, and Africa. With combined production capacities in Changchun, Hainan, and Nanjing exceeding 200,000 units, Mazda is well-positioned to enter the top ten in the Chinese market.
While Volkswagen and GM focus on closing opponents and capturing market share, Mazda aims to support Ford’s growth and regain its position as a top-tier automaker globally. Through this partnership, Mazda brings valuable experience and marketing strategies that have contributed to its rapid growth in China.
Ford, in turn, is learning from Mazda’s approach, particularly in the low-end sedan market where brand reputation and affordability are key. Mazda’s Japanese-style channel marketing emphasizes standardized parts pricing and service quality nationwide, making it more attractive compared to European or American options.
From a financial perspective, Ford’s parent company provides strong backing, allowing Mazda to grow and operate more efficiently. This is a critical opportunity for Mazda to strengthen its position in the Chinese market.
Since entering China, Mazda started with technology transfer, establishing two strongholds in Hainan and Changchun. It has since expanded its technological contributions to Hainan and participated in capital operations through the Nanjing plant. Some experts believe that Mazda may follow Mitsubishi’s path, achieving formal equity involvement under the Ford umbrella, similar to how Mitsubishi partnered with Beijing Jeep.
Mazda’s journey in China has been remarkable. Once nearly forgotten, it found success in the 1990s when it became a target of Western capital. However, in 2002, the Hainan Mazda project, initially not a priority, began to shine. The Primica became a surprise hit in the MPV segment, followed by the 323 model in 2003. The Mazda 6 in Changchun further solidified its presence.
At the Tokyo Motor Show in October 2003, Mazda’s president, Ieyasu, credited the Chinese and American markets for the company’s success. Today, Mazda continues to build on that foundation, leveraging its partnerships and strategies to secure a stronger future in China.
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