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| Daimler will
make luxury cars this
year |
Germany-United States auto giant DaimlerChrysler
said yesterday it will begin assembling Mercedes-Benz sedans at its joint
venture with Beijing Automotive Industry Holding Corp by the end of this
year.
The first Mercedes-Benz E-Class sedan will roll off the production line in
Beijing by the end of this year, said Trevor Hale, spokesman for
DaimlerChrysler (China) Investment Co Ltd, in a statement to China Daily.
His remarks clear up recent doubt about the timetable for local
production of Mercedes-Benz sedans created by later-than-expected approval
from the government.
The joint venture Beijing-Benz DaimlerChrysler Automotive Co Ltd was
granted final approval just days ago.
The 50-50 venture, which is part of a framework agreement worth 1
billion euros (US$1.2 billion) between DaimlerChrysler and Beijing
Automotive, will have an annual production capacity of 25,000
Mercedes-Benz E and C-Class sedans.
"It's too early to know how many vehicles we will produce this year,
and the point at which we reach the 25,000 capacity depends on market
demand," Hale said.
Sales of Mercedes-Benz cars rose in China as imports grew by 18 per
cent in the first five months of this year from a year earlier, he added.
Yale Zhang, a Shanghai-based analyst at US auto consultancy CSM
Worldwide Corp, said: "Output of Mercedes-Benz sedans in China will be
quite small in the early stages as their prices will not be competitive
due to the government's policy."
According to China's new auto industry policy, foreign brand cars built
domestically will have completed vehicle import tariffs imposed on them,
if the value of imported kits
used to make them account for 60 per cent or more of their value.
Tariffs on car imports stand at 30 per cent, with those on imported
components at 15 per cent.
The car imports tariffs will decline to 25 per cent by the middle of
next year in line with commitments to the WTO.
"Prices of Mercedes-Benz sedans made in China, as well as those of BMW,
would decline in the medium and long-term with increasing local contents,"
Zhang said.
"However, it will be a hard job for Mercedes-Benz and BMW, as luxury
brands, to enhance local contents of their vehicles built in China," he
added.
BMW started to produce its 3 and 5 Series sedans in 2003 at its joint
venture in northeastern China in partnership with Brilliance China Auto.
But BMW's sales on the mainland tumbled by 11 per cent year-on-year to
3,977 vehicles in the first quarter of this year.
China's luxury car market is mainly controlled by Audi, another German
brand, which began local production in the 1990s.
Audi, which runs a joint venture in northeastern China with First
Automotive Works Corp, sold 64,018 vehicles in China last year, up just
0.8 per cent from 2003.
Besides the Mercedes-Benz sedan project, DaimlerChrysler has agreed to
form a joint venture with Foton, an affiliate of Beijing Automotive, to
produce Mercedes-Benz heavy trucks.
DaimlerChrysler also plans to make 40,000 Mercedes-Benz vans annually
in a venture in eastern China with Fujian Motor Industry
Corp and China Motor Corp in Taiwan.
(China Daily) | 
Updated: 2005-06-17 17:06
