Chrysler 300C's China production may be suspended

German automaker Daimler AG is said to have reached an agreement with its former partner Chrysler LLC over Beijing Benz-DaimlerChrysler Automotive Co., Ltd. (BBDC), a 50-50 joint venture between DaimlerChrysler and Beijing Automotive Industry Holding Co., Ltd. 

The details are unknown, however, the result might be ended with Chrysler's quit from the Beijing-based 30-year venture. Chrysler employees have begun quitting BBDC in succession, with only four technicians left for the supervision of the production of Chrysler 300C and Chrysler Sebring, revealed people close to the venture. Daimler also has begun upgrading part of the production equipment in BBDC, an effort to make them meet the production standard of Benz-branded cars. Matters regarding to Daimler's departure with Chrysler in China is expected to be initially completed at the end of this year.

BBDC reduced the production capacity of Chrysler 300C and Chrysler Sebring to a large extent due to their poor sales, added the insider. Currently, it is said to be weighing a plan to suspend the production of Chrysler 300C as its stockpile could well satisfy the demand in the Chinese market. In order to consume stockpiled auto parts and components, BBDC will resume the production of the sedan model later.

Chrysler Asia denied the saying, adding that the manufacture and sale of both Chrysler 300C and Chrysler Sebring continue as usual. It has been in talks with BBDC on how to provide better products and service to the domestic consumers and believed that both sedan models would seize a bigger share in the Chinese auto market in the near future.

Chrysler is reportedly to have negotiated with several Chinese automakers, including Chery Automobile Co., Ltd. and Great Wall Motor Co., Ltd. (SEHK: 2333), over the establishment of auto joint ventures in China, the world's fastest-growing auto market. Chrysler Asia acknowledged the saying but declined to reveal who it had inked a formal contract with.

BBDC will become a venture between Daimler and BBDC after Chrysler's quit. It has established a new board and plans to attach more importance to the adjustments of its own structure and personnel in the second half of this year, revealed the insider. Notably, Daimler has made a decision to introduce a new sedan model to the Chinese market in 2010.