Mazda Motor Corp and Ford Motor Co will dissolve their joint venture in China by 2012, a move that would further weaken the ties between the two auto makers, Japan's Nikkei business daily reported yesterday.

Mazda, Ford and China's Chongqing Changan Automobile Co have basically agreed to split their three-way tie-up, Changan Ford Mazda, into two entities, Nikkei reported, citing sources.

They will likely spin off the joint venture's factory in Nanjing in east China's Jiangsu Province, as a 50-50 joint venture between Mazda and Changan Automobile Group, while Ford and Changan will run the venture's other factory in southwest China's Chongqing Municipality, the business paper said.

Mazda wants more freedom to accelerate its business in China, now the world's biggest car market, Nikkei reported.

"It was sometimes difficult to coordinate production (in the three-way joint venture,)" Nikkei quoted a senior Mazda official as saying.

Mazda's ties with Ford have weakened since the cash-strapped American auto maker cut its controlling one-third stake in Mazda to 13 percent in 2008.

But Mazda will continue its joint output with Ford in the United States and Thailand for the time being, Nikkei added.

Mazda is estimated to have produced about 70,000 cars in China in the two factories in 2009 and the auto maker plans to expand the annual capacity of the Nanjing plant to 200,000 units from 160,000 now, Nikkei reported.

Mazda's China sales rose 40 percent in 2009 to 180,000 units but it wants to boost sales to 300,000 units, the newspaper also said.