Suzuki appears headed for the emergency exit door from China after announcing today (4 September) it was pulling out of a second local joint venture.
In a statement, Suzuki Motor Corporation said it would transfer its 50% stake in JV Chongqing Changan Suzuki Automobile (Changan Suzuki) to local partner Chongqing Changan Automobile.
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Changan Suzuki will now operate as a 100% owned subsidiary of Changan Automobile and the JV’s Suzuki-appointed president will resign but, for now at least, the Japanese automaker will continue to license production and sales of its models to the Chinese company.
The transfer will be completed once legal proceedings in China are concluded.
“The transfer has almost no influence on Suzuki’s financial performances for this fiscal year,” the automaker said.
Suzuki chairman Osamu Suzuki said: “Approximately 25 years ago, we launched the Alto in China, and since then we have made efforts in cultivating the Chinese market. However, due partly to shifting of Chinese market to larger vehicles, we have decided to transfer all equity to Changan Automobile.”
The ending of the JV was first reported by the Nikkei at the end of last month but had been signalled earlier by Japanese broadcaster NHK.
Last June, Suzuki abandoned its other Chinese JV with Jiangxi Changhe Automobile which had operated for 23 years.
Recent media reports said the automaker ranked 41st by volume in China last year while its sales had nosedived from 220,000 in 2011 to just 86,000 last year. Year to date to March 2018, sales plunged a further 55.7% to 13,000 with March volume alone off 67.3% to 4,843.
