Ford Motor Co. (F) is likely to sell most of its remaining stake in Japan’s Mazda Motor Corp. from 13% to less than 3% by the end of this year. According to an undisclosed source, Sumitomo Mitsui Bank – Mazda’s main creditor – and other Japanese business partners of Mazda are in talks to buy the shares.

The partnership between Ford and Mazda began in 1979. Through the partnership, Ford intended to develop small and fuel-efficient cars using Mazda’s technology while Mazda depended on Ford to fund its research and development activities.

However, Ford loosened its ties with Mazda in 2008 by reducing its 33.4% stake in the latter to 13% and later to 11% in order to raise cash during the global economic crunch. The 11% stake still makes Ford the largest shareholder of Mazda.

Consequently, Mazda sought Toyota Motor Corp.’s (TM) help in March this year to obtain key components of hybrid systems – batteries, motors, control units and other electronic parts – from the latter, through a hybrid technology tie-up.

In addition, the likelihood of sale undoubtedly reveals Ford’s intentions to focus on its own brands. Apart from the namesake brand, Ford is currently left with Lincoln and Mercury brands after shedding its luxury lineups – Jaguar, Land Rover, Aston Martin and Volvo.

By the end of this year, the Mercury line-up will also be phased out at the cost of its Lincoln line-up. The company plans to launch as many as seven new Lincoln vehicles in the next four years, including a small car in 2014.

In spite of the reduced stake, Ford may continue with its business partnership with Mazda. According to Ford’s global manufacturing and affairs chief, John Fleming, the tie-up produces two to three shared manufacturing opportunities a year.

In August this year, the tie-up announced their plan to invest $350 million in their Auto Alliance joint venture (JV) plant in Rayong, Thailand. The investment will revamp the facility and will help building a redesigned version of their compact pickup trucks from mid-2011.

In June this year, Auto Alliance has already enhanced the annual capacity of the plant from 100,000 units to 275,000 units by investing $450 million for a new plant. The JV plant manufactures passenger cars, including Mazda2 and Ford Fiesta, and pick up trucks, which are exported to more than 130 markets around the world.

This apart, Ford, Mazda and Chongqing Changan Automobile revealed its plan to open a new engine manufacturing plant in the southwestern city of Chongqing, China. The JV, Changan Ford Mazda Automobile Ltd., has signed a memorandum of understanding with the local government to build the plant.

The plant, entailing an investment of $500 million, will be the third plant of the JV. The JV plans to begin construction of the new plant next year with production starting in 2013. The plant, with an annual production capacity of 400,000 engines, will double its existing engine capacity in China.

 
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