Mazda sales in China this year are likely to fall short of target because of intense competition and a bureaucratic problem that halted local production of the 3 model line, according to a report.

The Ford affiliate expects to sell around 135,000 vehicles in China this year, executive vice president Robert Graziano said on Friday, according to a report on Dow Jones' Marketwatch web site.

That would be more than the 133,778 Mazda brand vehicles the company sold in China last year, but would be well below the 10% sales growth for 2006 that the automaker set as its target at the beginning of the year.

Graziano reportedly reaffirmed Mazda's target of producing and selling 300,000 units annually in China by 2010, but didn't give a sales forecast for next year.

"We will achieve that (sales target for 2010) through accelerating our efforts in...introducing great products, increasing production capacity and expanding our distribution network," Graziano told Marketwatch. He would not say which models Mazda would introduce in China, or comment on the company's future investments there.

His remarks came as Ford prepared to launch the seven-seat S-Max people mover in China at the Beijing motor show on Saturday (18 November). Local assembly is scheduled to start at Changan Ford Mazda Automobile early next year.

According to Marketwatch, Mazda said it sold 101,000 vehicles in China from January to October, a 7% drop year on year. The company attributed this to competition in the local market and the [six-month] suspension of production of the 3 which, Ryoichi Hasegawa, director and senior marketing executive officer, said, resumed last month.

Mazda expects China sales to get a lift from the 6 sports sedan, plus sport utility vehicle models, and from the resumption of 3 sales, Kiyoshi Ozaki, a senior executive in charge of the company's China operations, told Marketwatch. He added the company hopes to resume 3 sales as soon as possible, but didn't give a date.

Marketwatch noted that joint venture partners Ford, Mazda and Chongqing Changan Automobile halted production of the 3 in April, less than two months after they started making the compact model.

Industry officials were reported to have said the Chinese government wants a single entity to manage the production and sale of the 3. The joint venture, Changan Ford Mazda Automobile, had been producing the car, but marketing was handled by FAW Mazda Motor Sales, a venture between Mazda and China's state-owned FAW Group. FAW Mazda handles sales and advertising for Mazda in China, Marketwatch added.

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