Mazda Motor plans to expand its alliance with China FAW Group by co-operating in the development of a redesigned compact luxury car and outsourcing production of a minivan, according to a report on Wednesday.
Citing the Nihon Keizai Shimbun newspaper, CBS Marketwatch said the car maker, owned 33.4% by Ford, is also planning to jointly produce passenger vehicles in China with Ford and Changan Automotive Group.

Strengthening ties with China FAW as well will allow the Japanese car maker to pursue a two-pronged strategy in the fast-growing local market, the report added.

Mazda reportedly said in a statement that it is in no position to discuss China FAW’s product plans, adding that it [Mazda] will launch eight new models during the next three or four years in China while declining to reveal the details.

The report said China FAW developed its current compact luxury sedan with the aid of Audi but Mazda will replace the German car maker as the development partner for the redesigned version.

Mazda’s midsize Atenza [6] will be used as the basis for the overhauled sedan, which is expected to be on the market as early as 2006, the reports said.

Mazda will also outsource production of the latest MPV minivans as soon as 2006 and the station wagon and hatchback versions of the Atenza are set to be outsourced next year, according to the reports.

The reports said the Chinese car maker produces the Atenza, the compact Familia [3] and the Premacy minivan on behalf of Mazda, which is expected to outsource production of 110,000 units this year.

The Nikkei reportedly said FAW Car spent about 2.3 billion yuan ($278 million) to build a factory in Jilin Province that is scheduled to begin operation in early July and the facility is expected to exclusively produce Mazda vehicles for the time being.

In 2003, Mazda sold roughly 80,000 vehicles in China, the second-highest tally among Japanese car makers, trailing only Honda, the reports noted.