China Business

Jun 3, 2006

DaimlerChrysler stepping up localization in China

BEIJING - German-US auto giant DaimlerChrysler plans to increase its utilization of China-made auto parts by eightfold over the next two years in a bid to step up localized production in its Chinese joint ventures, said Dr Till Becker, CEO of DaimlerChrysler's Northeast Asia region, on May 31.

Becker said that DaimlerChrysler wants to increase its annual expenditures on Chinese-made auto parts from US$100 million to

$840 million in 2008. The parts procured in China will be used in localized production by DaimlerChrysler's joint ventures in China, he said.

"DaimlerChrysler has a long-term commitment to China with regards to localization," he explained. "More Chinese auto parts suppliers will join our production supply chain."

Beijing-Benz DaimlerChrysler Automotive Corporation, a 50-50 joint venture of the Beijing Automotive Industry Shareholding Co Ltd and DaimlerChrysler Company, involves an investment of $600 million and a registered capital of $400 million.

Beijing Benz produces mainly jeeps and vehicles for military use and Mercedes-Benz sedans. In the first quarter of the year, a total of 2,470 locally assembled Mercedes-Benz sedans were sold across China.

A Beijing-Benz DaimlerChrysler official recently rejected the speculation that China will suspend domestic production of Benz cars. Cadillac and Cherokee have recently stopped localized production in China due to the lack of a Chinese logo. Benz faces the same problem.

China's fast-growing auto market is the world's largest after that of the United States.

(Asia Pulse/XIC)

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