Feb. 19 (Bloomberg) -- Daimler AG and its Chinese partner Beiqi Foton Motor Co. will invest 6.35 billion yuan ($1 billion) in a new truck-making venture in China, said Anthea Wang, Beijing-based spokeswoman for the German company.
The two companies received a business license from the government to operate the new partnership, in which each side will have a 50 percent stake, Daimler said in an e-mailed statement yesterday. A Beiqi Foton plant in Beijing is being retooled to give the venture annual production capacity of 160,000 vehicles, according to the statement.
Automakers such as Daimler, General Motors Co. and Volkswagen AG are looking to the world’s biggest vehicle market for growth as European demand sags on concern over the region’s sovereign debt crisis. Daimler’s new venture, Beijing Foton Daimler Automotive Co., will make Auman-branded medium- and heavy-duty trucks in China, and start production in the third quarter of 2012, the Stuttgart, Germany-based company said.
The move will reinforce Daimler’s position as a “major automotive player in the China truck market,” Andreas Renschler, head of Daimler’s truck and buses unit, said in the e-mailed statement.
Wu Yuejun was appointed president of the joint venture, according to the statement. China Central Television reported the investment figure earlier today.
China overtook the U.S. as the world’s largest auto market in 2009, as the government put in tax breaks and rebates to help spur sales during an economic slowdown. The China Association of Automobile Manufacturers forecast the nation’s vehicle sales to rise 8 percent this year.
China is also clamping down on overcapacity. The National Development and Reform Commission and Ministry of Commerce said on Dec. 29 they would move conventional auto manufacturing off the list of “encouraged” industries for foreign investment. The Beijing Foton Daimler Automotive venture received approval from Chinese authorities on Sept. 26, Daimler said back then.
--Editors: Nicholas Wadhams, Simone Meier
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