Ford is reportedly considering selling most of its 11% stake in Mazda Motor, itself already whittled down over the years from about one-third.
The president of Sumitomo Mitsui Banking Corp on Monday told Kyodo News the bank would decide by the end of this year whether to purchase Mazda shares from Ford.
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Masayuki Oku also said Sumitomo would not sell any of its stake in Mazda to another carmaker ”for the time being” if the bank carries out a share purchase from Ford and become Mazda’s largest shareholder.
The bank, which has close business ties with Mazda, currently holds a 2.9% of the automaker.
Sumitomo has also, over the years, held small stakes in Mazda importers and distributors in some markets, often holding a slice in conjunction with the automaker and local firms.
Oku on Monday denied a report that Ford’s decision, which would relinquish its position as the biggest shareholder of Mazda for the first time since their capital tie-up in 1979, reflects the deteriorating financial health of the US auto manufacturer. He declined to comment when asked about the true reason for the move, Kyodo said.
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By GlobalDataEarlier, a source told Reuters on Saturday Ford would slash its ownership of Mazda to a few percent from 11% and that Sumitomo and other Japanese business partners of Mazda were in talks to buy the shares.
Oku noted that Ford’s reason for selling its stake in Mazda was not because it needed cash, as some media reported, Reuters said.
“I can’t disclose what they are, but there are other reasons. If we become Mazda’s top shareholder, the operational and psychological relationship between Ford and Mazda will not change,” Oku said.
Sources told the news agency Ford was looking to sell its Mazda stake to gain more freedom for its Chinese operations. A three-way venture between Ford, Mazda and Chongqing Changan Automobile is currently seeking government approval to split into two, with Ford and Mazda each partnering Changan separately.
“It sounds like Ford decided to cut its ties with Mazda, and it would rather nurture its Chinese venture businesses,” Fumiyuki Nakanishi, a manager at SMBC Friend Securities, told Reuters.
News that Ford was looking to sell most of its remaining stake in Mazda took few by surprise, and JP Morgan Securities auto analyst Kohei Takahashi said he viewed a further break from Ford as positive.
“Mazda has indicated that it wants to expand sales of its ‘Sky’ series of next-generation powertrains in the future, and we believe that achieving greater capital independence would help Mazda expand its business with companies outside the Ford group,” he wrote in a note to clients.
“Ultimately this could mean that at some point Mazda finds itself aligned with someone else,” CLSA Asia-Pacific Markets auto analyst Christopher Richter said. “As I scan the horizon of other Japanese, European or US automakers, nobody jumps out. The most likely suspect would be a Chinese or Indian automaker with global ambitions.”
Analysts told the news agency, however, that Mazda would likely prefer to stay independent. Mazda officials have privately lamented the lack of flexibility in the past even under Ford’s control.
“They’re not desperate, so (a new grouping) doesn’t have to happen tomorrow or even next year,” Richter said. “They can make an argument (to their shareholders) to stay independent as long as they’re profitable. And because a sale to a Chinese automaker, for example, would be controversial, they may not need a hell of a lot of convincing.”
Mazda has forecast a JPY5bn net profit (US$61.40m) for the fiscal year to 31 March but faces worsening conditions under the yen’s rise. Because it builds most of its cars in Japan, it is especially vulnerable to a strong yen.
Mazda and Ford have been growing apart in some areas. In the most recent distancing, Mazda last March turned to Toyota for help in developing its first hybrid car, instead of Ford.
Both Ford and Mazda called the report speculation, issuing similar statements stressing their strategic alliance remained intact.
Mazda CEO Takashi Yamanouchi is due to address media on Wednesday about the company’s next generation technology.
