BEIJING (Reuters) -Changan Ford Motor (NYSE:F) plans to set up a new-energy passenger car joint venture with state-owned Chongqing Changan Automobile, a document published by China's market regulator on Friday showed.
Changan Ford Motor will own a 60% stake and Chongqing Changan Automobile the remaining 40% stake. Changan Ford is a 50-50 joint venture between Ford Motor Co and Changan Automobile, meaning Chongqing Changan will own more than 50% of the new venture.
In the future, the joint venture plans to engage in the "supply business of mainstream brand new energy passenger vehicles and the distribution business of Ford brand models that Changan Ford has invested in," the statement said. Ford said in a later statement the new venture also will sell existing Ford-brand gas-powered vehicles.
Ford said the venture was being formed "to better grasp the development trend of electrification and intelligence in the auto industry."
Asked whether this new venture means Ford is minimizing its exposure in China, spokesman Anderson Chan said it was aligned with CEO Jim Farley's strategy that includes leaning into the strength of the company's partners in China. The company said it would provide further details later.
Farley said last month during the company's earnings conference call that the U.S. automaker may have to use its local partners' vehicle platforms more "in certain segments," excluding pickups and large SUVs.
Changan officials could not be reached for further comment.
Sales of Ford with Changan fell 12.6% in the first half form the year-ago period, China Association of Automobile Manufacturers data showed.
More than 40 brands have cut prices in China since January after an initial move by Tesla (NASDAQ:TSLA) in a fight for market share in the world's biggest auto market, as car demand slumps, with ripples spreading through the wider industry.