(Yicai Global) April 6 -- Mazda Motor’s two Chinese joint ventures are poised to merge, sources told Yicai Global, with Changan Mazda Automobile left to produce and sell the Japanese automaker’s vehicles in China.

Hiroshima-based Mazda is in talks with partners China FAW Group and Chongqing Changan Automobile to fold FAW Mazda Motor Sales’ Mazda-related business into Changan Mazda, which is half owned by Changan Auto. FAW Mazda Motor Sales is 40 percent owned by Mazda.

The merger is largely at Mazda’s behest, an executive at a FAW Group subsidiary said. The foreign JV partner must undoubtedly tighten its grip as China lifts limits on foreign shareholding ratios in joint ventures and relaxes restrictions on overseas investment, the person added.

FAW Mazda Motor Sales staff are moving to FAW Group’s Hongqi and Bestune divisions, a FAW Group insider told Yicai Global. Sources at Chongqing Changan Automobile also confirmed the merger. In addition to the dealer-level union, production of the Artez and other models will also be shifted to Changan Mazda from the FAW-Mazda venture, they said.

Sales of Mazda-branded cars in China have fallen year-on-year since 2017, when they exceeded 300,000 for the first time, according to Mazda China data.

Mazda sold 217,000 vehicles in the country last year, down nearly 30 percent from 2017. Of this, FAW Mazda Motor Sales sold 798,000, an annual decline of 12.7 percent, while sales by Changan Mazda rose 2.8 percent from 2019 to 137,300.

Editors: Xu Wei, Peter Thomas