Shanghai (ZXZC)- Chinese automaker Chongqing Changan Automobile Co.,Ltd (Changan Automobile) plans to acquire the stake in Changan Suzuki possessed by the Japanese investor Suzuki, according to a statement released by the Chongqing-based automaker on June 28. Meanwhile, the brand of Changan Suzuki will still remain after Changan Automobile takes over Suzuki's equity in the Sino-Japanese joint venture.

Founded in May, 1993, Changan Suzuki is held by three parties: 50% by Changan Automobile, 40% by Suzuki and 10% by Suzuki (China) Investment Co.,Ltd.

The news about Suzuki retreating from the world's largest car market has pull out before. Japanese media also reported on June 19 that Suzuki had already made the decision to quit its China market. At that same, the Japanese automaker was negotiating with Changan Automobile in terms of the plan about how to retreat from China. No doubt, Changan Automobile's announcement corroborates the previous rumor.

According to the announcement, Changan Automobile and Suzuki will make joint effort to maintain their partnership in technology and trade and promote the operation of Changan Suzuki in China.

Some insiders considered that the partnership between both companies could be kept by empowering Changan Automobile to manufacture the Changan Suzuki branded vehicles, rather than in the form of joint venture.

The flagging sales performance was the essential reason for Suzuki's withdrawal from the joint venture. According to the data from the China Passenger Car Association (CPCA), Changan Suzuki's annual vehicle sales in 2017 only reached 86,513 units, plunging 26% year on year. The company also suffered a profit loss up to RMB 84.82 million last year. For the first five months this year, the joint venture saw its cumulative sales slumping 47% over the previous year to around 21,000 units.