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Mercedes sedans to be built in
Beijing
BEIJING - US-German
auto giant DaimlerChrysler has said 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 sedans will roll off the
production line in Beijing by year's end, said
Trevor Hale, spokesman for DaimlerChrysler (China)
Investment Co Ltd, in a statement to China Daily.
His remarks cleared up recent doubts 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 joint 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% 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% or more of their value.
Tariffs on car imports stand at 30%, with those on
imported components at 15%. The car imports
tariffs will decline to 25% 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, will decline in
the medium and long-term (as the local content
increases)," Zhang said. "However, it will be a
hard job for Mercedes-Benz and BMW, as luxury
brands, to enhance the local content 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% 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% 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 of Taiwan.
(Asia
Pulse/XIC) |
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