TOKYO (Reuters) - Suzuki Motor Corp (7269.T) said it would transfer its 50 percent stake in a Chinese automaking joint venture (JV) to Chongquing Changan Automobile Co (000625.SZ), as sluggish sales prompt the Japanese firm to retreat from the world’s largest auto market.
Suzuki has been struggling to sell its compact models in China in recent years with a growing middle class increasingly opting for larger cars. The firm unloaded its 46 percent stake in a JV with Jiangxi Changhe Automobile in June.
In a statement on Tuesday, Suzuki said it would transfer its equity in Changan Suzuki, formed in 1993, to Changan Automobile, making the JV a wholly-owned subsidiary of the Chinese company.
“Due partly to shifting of (the) Chinese market to larger vehicles, we have decided to transfer all equity to Changan Automobile,” Suzuki Chairman Osamu Suzuki said in the statement.
Chinese sales of vehicles produced under licensing by Changan Suzuki, including the Vitara compact SUV, will continue for the time being, the Japanese automaker said.
Suzuki sold 105,000 vehicles in China in the year ended March, down 29 percent from a year ago, and significantly reduced from 252,000 in 2013.
While sales have diminished in China, Suzuki continues to dominate the vehicle market in India, its biggest market.
Reporting by Naomi Tajitsu; Editing by Himani Sarkar