May 10 (NBD) -- Changan Suzuki is back in the headlines after new rumors have surfaced over the possibility of its withdrawal from the market again.

Such rumors began floating around as early as 2016, but an industry insider's recent tip-off again fueled the speculation that the struggling automotive joint venture will exit the Chinese market.

Recently, an industry insider said that a domestic automotive nameplate has agreed to buy a Japanese JV brand by June 30 and the acquired then will be merged into the domestic brand's commercial and passenger car system. 

Many people subsequently pointed to underperforming Changan Suzuki. 

In 2016, Changan Suzuki revealed the plan to cancel its technology center. This was viewed as a symbol that Suzuki Motor Corporation (Suzuki) would pull the plug on its business in China. 

In response, Changan Suzuki issued a statement saying that Changan Automobile Co and Suzuki Motor Corporation have been actively discussing about the development of Changan Suzuki, and the JV will always maintain a responsible attitude towards consumers and related parties in accordance with laws and regulations. However, the company didn't refute the rumors directly in the statement. 

Automotive analyst Yan Jinghui told NBD that exiting the market is complicated and couldn't be done simply through a statement. The vague statement of Changan Suzuki is probably a sign that Changan Automobile and Suzuki both lack confidence in the future development of their JV. 

In a field visit, NBD found the rumor doesn't seem to have much impact on dealers of the JV in Beijing. 

At a Changan Suzuki 4S store located on the South Fourth Ring Road, the Vitara, SX4 S-cross, Swift, and other models are still available for sale. A salesperson told NBD the Vitara is the best-selling model, contributing around half to the store's total sales. All variants, but the low-spec 4WD one, of the SUV are available for immediate delivery, but the out-of-stock variant could be shipped within around half a month. 

A salesperson of another 4S store said to NBD that the dealer is currently replenishing the stock of the Vitara, and all the newly-bought Vitaras were manufactured in April or May. Unexpectedly, NBD noticed the dealer is also selling Beijing Hyundai and Zotye models. 

Industry insiders explained automotive JVs will go through a long, complicated procedure before the withdrawal. 

In addition to account clearing, there are a lot of legal affairs to deal with and it is not an easy thing, Yan Jinghui said to NBD. Even though Changan Suzuki has the withdrawal plan, the company will take a series of preparatory moves, including making formal announcement and declaring follow-up plan. However, there is no substantial evidence at present. 

In Yan's view, Suzuki is unlikely to let this happen as China is the world's largest car maker and Changan Suzuki's withdrawal will exert enormous negative impacts on the Japanese brand's future development. 

Undoubtedly, Changan Suzuki is facing a string of tough challenges, including lack of new models and unclear development direction. This leads to a sharp drop in sales. Data shows the company's annual sales slipped to 83,900 cars last year from 220,000 in 2011. 

Some industry insiders said the strategy of focusing on top-notch small cars is another important reason behind the auto manufacturer's predicament.  

The company would succeed if it could grab a large share of the small car market, but unfortunately it failed. 

Anyway, there is no much time left for the company, as the JV agreement between Changan Automobile and Suzuki will expire in 2023.  

Email: lansuying@nbd.com.cn