Mazda Motor of Japan has scrapped plans for a new factory in the U.S. because of deteriorating sales and the troubles at its partner Ford Motor ( F), reports the Nikkei business daily.

Mazda later issued a statement saying it hadn't planned to expand output in the U.S. in the first place, Reuters reports.

Mazda had considered using a former Ford plant, or building a new one with Ford, to produce fuel-efficient mid-size cars, Nikkei reported. The plant had been scheduled to open after 2010.

Ford's consideration that it sell part of its 33.4% stake in Mazda was another reason to scrap the plan for a second U.S. factory, the newspaper said.

This article was written by a staff member of TheStreet.com.

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