While Europe and the USA don’t seem to get a grip on their economic troubles, China becomes stronger all the time. A few years ago, an east-western ‘joint venture’ meant a strong western company making a deal with a little Chinese rat-shop in order to browbeat the labour unions at home. Today, even market leaders in the West negotiate with would-be partners at eye level.
Therefore it already is a key player in China’s truck segment.
Daimler will contribute its technological expertise to the joint venture — especially in the area of diesel engines and exhaust gas systems — so that Chinese emissions limits, ranging up to the Euro V standard, can be fulfilled. Localized production of Mercedes-Benz’s redeveloped OM 457 engines are supposed to be an integral part of future operations at the joint venture.
»This is an important step for the global growth strategy of Daimler, as well as the local expansion of our portfolio,« says Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler and Head of Mercedes-Benz Cars. »With our 50 percent stake in Beijing Foton Daimler Automotive, we are further strengthening our position as an important player in the China market. Having now received the final green light for the joint venture, this also sends out a clear signal that we deliver on what we promise.«
Daimler hopes that the final approval for the joint venture between Daimler Trucks and Foton Motor will allow it to thoroughly participate in the growth of the Chinese truck market. In 2010, the Chinese market for trucks over six tons GVW had a volume of 1.2 million units. Forecasts indicate that about 1.5 million trucks over six tons GVW will be sold annually in China from now until 2020.
((Auman truck from Foton with engine OM 457 LA from Mercedes-Benz
»This marks a milestone for the joint venture between Daimler and the Chinese truck manufacturer, Foton Motor, and for the implementation of Daimler Trucks’ worldwide strategy,« says Andreas Renschler, a member of Daimler’s Board of Management and Head of Daimler Trucks and Buses. »The flexibility, persistence, patience, and intercultural understanding of both parties were decisive factors in forging this partnership and obtaining the final go-ahead.«
Xu Heyi, Chairman of BAIC comments: »We are very pleased to see that the joint venture between Daimler Trucks and Beiqi Foton has obtained approval, since Daimler is a longstanding associate of ours here in China. This marks another milestone in the strategic cooperation between Daimler and BAIC.«
Ulrich Walker, Chairman and CEO of Daimler Northeast Asia, explains the negotiations: »Thanks to the great progress made during the past few months, the way is now clear for both partners to establish the joint venture. Daimler will gain a 50 percent stake in Foton Motor’s medium- and heavy-duty truck business which further strengthens our position to address all segments of the market in China: passenger cars, trucks, vans and financial services.«
Both partners will use Foton’s truck brand Auman as a platform to grow business in China and look at cooperation opportunities outside of China. In addition to making use of Forton’s sales and service network for the medium- and heavy-duty truck sector, the Chinese company will also contribute its market know-how in China and the rest of Asia to the joint venture. A second truck plant is already being ramped up, giving the Beijing Foton Daimler Automotive joint venture a total production capacity of 160,000 trucks.
Engine OM 457 LA from Mercedes-Benz.