Mazda may halt U.S. production venture with Ford-Kyodo-UPDATE 1

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Friday March 04, 2011 12:21:03 AM GMT

* Mazda: nothing has been decided

* Output has been far below capacity due to weak sales

(Adds company comment, background)

TOKYO, March 4 (Reuters) - Mazda Motor Corp is considering halting production at its U.S. joint venture with Ford Motor, Kyodo News reported on Friday, as the Japanese automaker suffers weak sales of the main model it makes there.

"We have been studying various measures to improve business of Auto Alliance International, but nothing has been decided," Mazda spokeswoman Kozue Nitta said, referring to the firm's 50-50 production joint venture with Ford in Flat Rock, Michigan.

The plant has an annual output capacity of 240,000 units, with half of that belonging to Mazda, which makes the Mazda6 passenger car there.

But due to weak sales of the model, the company's production at the venue was about 45,000 units last year.

In November that year, Ford cut its stake in Mazda to 3.5 percent from 11 percent, losing its place as the top shareholder in Japan's No.5 carmaker.

Ford had been the Hiroshima-based carmaker's biggest shareholder since 1979 when it took a 25 percent hold, lifting that to a controlling 33.4 percent in 1996.

In the United States, Mazda's Tribute SUVs are made at Ford's Kansas City plant. (Reporting by Taiga Uranaka; Editing by Nathan Layne and Joseph Radford)

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