China: Daihatsu Dissolves Joint-Venture with FAW Jilin Auto
The joint-venture (FAW Daihatsu (Jilin) Body Parts Co., Ltd. - FDJB) was established to manufacture automotive parts and Daihatsu Motor Co. owned 50% of it. This stake will now be transferred to FAW Jilin Auto, as a result of a change in the Japanese automaker’s sales plan for China. Thus, FDJB will continue to manufacture vehicle parts as part of the FAW Jilin Auto.
This decision will not affect the partnership between Daihatsu and FAW Jilin Auto, consisting in a technology licensing agreement.
In July 2009, Daihatsu decided to start selling its products in China under the FAW brand, in an attempt to increase the company’s microscopic sales. To give you an example of what microscopic means, we will mention the Xenia Model. The compact MPV was introduced on the Chinese market by Daihatsu (in collaboration with FAW Jilin Auto) in 2007 and its 2008 sales figure was not any greater than 5,100 units.
One might think that this distress is absolutely normal under the current economic conditions but other manufacturers, including Toyota, who owns the majority stake of Daihatsu’s capital , have written financial success history in China during 2009.
Maybe the Chinese market just isn’t the main focus for the company. After all, Teruyuki Minoura, Daihatsu Motors’ President, declared back in December that the automaker expects its global 2010 mini-vehicles sales to stay flat and its general vehicles sales to rise 3 percent, with the growth centered on Indonesia and Malaysia.