Mercedes-Benz light vehicles settled in China with a capacity of 40,000 vehicles

Mercedes-Benz is set to expand its presence in China with the production of light-duty trucks, aiming for an annual capacity of 40,000 units. The Mercedes-Benz Lingting model is expected to enter production in China by the end of 2005. On November 29, DaimlerChrysler (China) Investment Co., Ltd. announced that the National Development and Reform Commission had finally approved a joint venture between DaimlerChrysler AG, China Motor Corporation from Taiwan, and Fujian Automobile Industrial Group. This collaboration aims to produce Mercedes-Benz light vehicles in mainland China. After years of planning, the project has now taken shape. The joint venture will be equally owned by all three parties, with a 50:50 shareholding structure. The new plant, located in Fuzhou, Fujian Province, will manufacture the Mercedes-Benz Sprinter and Vito/Viano models. With two shifts per day, the facility will have a total capacity of 40,000 units annually. The total investment for this project is expected to reach 200 million euros. The joint venture is scheduled to be established in mid-2004 and begin operations by the end of 2005. It will serve as the main production and distribution hub for Mercedes-Benz light vehicles in China and other Asian markets. According to one of the partners, the project initially appeared to be a three-way agreement, but in reality, it was a 50:50 partnership between DaimlerChrysler Hong Kong and Fujian Auto Group. The inclusion of DaimlerChrysler Hong Kong in the joint venture was necessary to comply with Chinese regulations, which limit foreign equity in automotive ventures to no more than 50%. To meet these requirements, the existing facilities and workforce of Southeast Automotive—jointly owned by Fujian Auto and China Motor—were used to form the new company, without including China Motor as a shareholder. Industry insiders believe that DaimlerChrysler holds a dominant position in the arrangement, given its control over technology and brand rights. The project faced delays due to previous unsuccessful ventures in China, such as Beijing Jeep, which failed to meet sales expectations. Before final approval, DaimlerChrysler was required to submit a comprehensive development plan to ensure the success of future projects. In addition, the new joint venture will rely heavily on Southeast Automotive for production support, personnel training, and sales networks. China Motor's successful management and marketing strategies are also seen as key assets in this partnership. As the project moves forward, it marks a significant step for Mercedes-Benz in expanding its footprint in the Chinese market.

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