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China approves Foton-Daimler JV

By Yan Pei
0 CommentsPrint E-mail China.rog.cn, July 15, 2010
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China's National Development and Reform Commission has approved a 50-50 joint venture between Beiqi Foton Motor and Germany's Daimler AG, China Business News reported Thursday.

Signing of the agreement was originally scheduled for today, but has been delayed according to insider at Beiqi Foton. Overseas media reports indicate Daimler is keen to seal the deal during German Chancellor Angela Merkel's July 15 to 18 visit to China. Daimler will invest 800 million Euros in the venture, which will produce heavy trucks, according to overseas media.

Beiqi Foton and Daimler signed a letter of intent on cooperation in Beijing in August 2008, and a cooperation agreement on commercial vehicles in Berlin in January 2009. Based on these agreements, the two sides are expected to invest a total of 6 billion yuan.

The two sides will also set up a global operations center to explore emerging markets.

In 2007, Daimler sold Chrysler and restarted cooperation talks with Beiqi Foton. At that time, Daimler had also just sold its stake in Chinese bus maker Yaxing Benz Ltd. and was looking for a new Chinese partner.

According to existing agreements, the venture will produce 1.5 million vehicles per year by 2015, of which 30 percent will be exported, and 10 percent will be energy-saving vehicles.

China's business press carried the story above on Thursday. China.org.cn has not checked the stories and does not vouch for their accuracy.

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