Daimler investing $1 billion with Beiqi in China
Appropriate business license granted
Both have recently received a required business license from the Chinese Government. Each company will have 50 per cent of the business.
Annual capacity set to increase for Beiqi
Beiqi’s Foton factory will have an increased annual capacity of 160,000 as an adjustment to the new deal. The deal will start with production of trucks in the third quarter of this year.
Foreign car makers looking to expand in China
Daimler are not the only car makers looking to expand in China following poor customer confidence across the European region. Volkswagen, General Motors and BMW are all looking to raise their profile in China. Since 2009, China has become the largest automotive market in the world, knocking off North America and keeping ahead of them. The market has been rising over the past couple of years with this year anticipating a rise of 8 per cent.
The problem with that…
The Chinese Government has made clear that there are problems with the overcapacity of vehicles in the country, with this needing to be clamped down. It may prove difficult for foreign automakers to expand in the country following recent revelations. The automotive industry will no longer be a Government recommended industry to invest in.
Daimler one of the leading truck producers
This move will help Daimler enhance their position as one of the largest dealers in the Chinese truck market. The President of the joint venture is Wu Yuejun as reported by Chinese television reports.
Beiqi Foton Motor Co has recently seen a dramatic increase in growth. Since the company opened in 1998, the company have grown from strength to strength. In 2011, there were 100,000 medium and heavy duty trucks sold by the company. This in effect made the company one of the leading truck makers in the country.
Daimler said that truck volume within the country has greatly increased over recent years, releasing a statement which read “The market’s volume has doubled over the last five years, and more than 1 million trucks are now being sold in this segment in China,”
In China alone, 40 per cent of worldwide sales of medium and heavy duty trucks were accounted for last year. This figure is expected to rise in 2012 with the deal of Mercedes-Benz and Beiqi.