Ford Australia is buying out Prodrive from its Ford Performance Vehicles joint venture and absorbing the specialty auto maker into its general operations with the loss of 32 jobs at FPV.

The partners determined the business situation was unsustainable in the long term.

“As a result of the business review, Prodrive has made the decision to exit the performance-car market at the end of 2012,” Managing Director Bryan Mears says in a statement.

A memorandum of understanding calls on Ford to purchase the FPV assets required to engineer, manufacture and market the FPV brand in Australia. Prodrive currently owns 51% of FPV and Ford owns 49%.

Negotiations are expected to be completed shortly, with Ford taking over by year’s end. The auto maker will be responsible for all future development programs, the manufacture of FPV engines and vehicles and marketing the FPV brand.

Ford Australia President and CEO Bob Graziano says the auto maker recognizes the passion and dedication of FPV enthusiasts and their desire to see Ford high-performance vehicles available in the market.

“Although this segment of the market is relatively (a) niche, it is an important part of Ford’s performance history and DNA,” he says in a statement. “Both partners have worked hard to ensure the FPV brand can continue to thrive in Australia (after) the change to our current arrangements.”

FPV earlier this month released what it calls its most hardcore GT yet, the GT RSPEC Limited Edition Series priced at A$76,990 ($79,560).

Production of FPV engines moves to Ford’s engine plant in Geelong, Victoria, while full-vehicle assembly shifts to Ford’s Campbellfield plant outside Melbourne. The auto maker said last month it was cutting 440 jobs at the two sites, but some workers – fewer than the 32 FPV employees losing their jobs – will be retained to build and assemble FPV products in-house.

FPV vehicles will continue to be sold through Ford’s dedicated network of FPV specialist dealers in Australia. There will be no change to service and warranty arrangements.

“Our current and future customers should experience little, if any, change to the way they interact with the FPV brand,” Graziano says. “We look forward to continue providing them with the outstanding performance and specialist service they have enjoyed to date.”

FPV’s origins date back to 1991, when the U.K. company Tickford began a collaboration with Ford Australia branded as Ford Tickford Experience to produce high-performance variants of the locally built Falcon range. A dealer network was created in 1999.

FPV was formed in 2002 after the purchase of Tickford by Prodrive.