BBDC denies Chrysler car production suspension

Beijing Benz- DaimlerChrysler Automotive Co., Ltd. (BBDC), a 50-50 joint venture between DaimlerChrysler and Beijing Automotive Industry Holding Co., Ltd., is said to stop producing Chrysler sedan models - 300C and Sebring.

A top BBDC executive denied the saying on September 11, adding that the venture was in talks with Chrysler LLC over the issues like OEM fees and marketing fees. On the production of Chrysler 300C and Chrysler Sebring, BBDC paid royalty fees to Chrysler instead of DaimlerChrysler after Chrysler departed with Daimler. Currently, BBDC and Chrysler are split on the royalty fees BBDC pays and the marketing fees Chrysler pays.

Previous sources said that Daimler had reached an agreement with Chrysler over BBDC. The details are unknown, however, the result might be ended with Chrysler's quit from the Beijing- based 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.

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 solved at the end of this year. Notably, BBDC is reportedly to have reduced the production capacity of Chrysler 300C and Chrysler Sebring to a large extent due to their poor sales. Moreover, 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.

Chrysler 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. It expects an annual sales growth of over 100 percent in China this year.

Statistics show that BBDC inked a six-year contract with Chrysler on the production of Chrysler 300C and Chrysler Sebring in China. Under the contract, the two car models, which have been marketed in the Chinese market since November 2006 and March 2008, will be produced in BBDC till 2012 and 2013, respectively. And the departure between Chrysler and Daimler as well as the sales of both car models will have no impact on the contract.