TOKYO -- Another chapter is coming to a close in the long-standing Ford-Mazda partnership. And this time, it's good for both.
The Chinese government has finally granted initial approval for the companies to break up and reform their unwieldy three-way joint venture with China's Changan Automobile Co.
The petition, supported by both Ford Motor Co. and Mazda Motor Corp., has been in limbo since 2010. China was sitting on it, amid concern about mushrooming brands and overcapacity in China.
Now, Beijing seems to have changed its tune.
Approval came during Ford CEO Alan Mulally's recent trip to China, where he attended the groundbreaking of two Ford plants and unveiled plans to sell the Lincoln brand there.
Under the proposed deal, Ford would set up its own 50-50 joint venture with Changan, and Mazda would do the same.
It's a win for the foreign brands because it gives each more control of the operation and a bigger slice of the earnings.
In the current three-way setup, Changan is the boss, with a 50 percent stake. Ford has 35 percent, and Mazda has just 15.
Now, Ford will have a greater say in its expansion plans.
And Mazda, previously struggling as a third wheel in the shadow of Ford-Changan, can give its own brand a higher profile. China has been a critical weak link in its global operations.
Independence could pay off big for Mazda. Whereas Ford is the No. 13 brand in China and Changan is No. 19, Mazda isn't even in the top 20. Mazda hopes the new arrangement gives it a boost.
Last month's approval from China's National Development and Reform Committee, was the first of several sign-offs.
Mazda says the proposed reorganization still needs green lights from Ministry of Commerce, the State Administration for Industry and Commerce, and the Ministry of Industry and Information Technology. But the first hurdle was deemed to be the toughest and should clear the way for the others, Mazda says.
Mazda is already plowing ahead.
It will rechristen its spinoff Changan Mazda Automotive Corp., with local headquarters in Nanjing, one of the current manufacturing locations for Changan-Ford-Mazda.
Mazda also will invest 500 million yuan (about $79 million) to build its own r&d center in the city.
Construction should be finished by 2016, but it will start limited operations next year. Mazda says building the center is unrelated to winning government approval for the overhaul.
Japan's Nikkei business daily said that granting approval for the joint-venture breakup hinged on Mazda having its new firm operate an r&d center in China as well as Mazda's making and selling original-brand vehicles. Mazda also was urged to introduce next-generation drivetrain technology, the report said.
Mazda spokeswoman Michiko Terashima declined to comment on other details of the new joint venture.
But Nikkei said Ford gets the Changan-Ford-Mazda assembly operation in the city of Chongqing, which makes Ford vehicles. Mazda would take over the Nanjing plant, which makes Mazdas.
Ford bought a 25 percent stake in Mazda when the small Japanese automaker was struggling in 1979. In 1996, again amid troubles at Mazda, Ford raised its stake to a controlling 33.4 percent.
But in 2008, cash-strapped Ford starting selling its Mazda shares. Over two years, Ford sold down its stake to 3.5 percent. Ford's stake withered to 2.1 percent earlier this year when Mazda sold more shares on the market to raise cash.
In August, Mazda ended production of Mazda vehicles at AutoAlliance International Inc., a Flat Rock, Mich., assembly plant owned jointly with Ford.
One last untarnished outpost of their cooperation is AutoAlliance Thailand Co. In April, the companies said they were investing $27 million to expand the plant's pickup capacity by 20,000 units, to 195,000 units a year. The plant's total capacity, including its passenger-car line, is 295,000 vehicles a year.