Beijing Auto to spend 10 bln yuan on 3 projects

Shanghai, December 2 (Gasgoo.com) In the coming few months, Beijing Automobile Industries Holding Co (Beijing Auto, Beiqi) will invest 10 billion yuan ($1.47 billion) in three key projects, said xinhuanet.com today.

According to Xu Heyi, chairman of Beijing Auto, the 10 billion yuan will be invested into the own-brand passenger vehicle development, Foton-Cummins Engine venture, and Foton-Daimler Heavy Truck venture. This move is seen as part of China's current massive investment efforts to stimulate the sluggish economy.

Beijing Foton Cummins Engine, a 50-50 joint venture of Foton and Cummins, has launched a diesel-engine-making project, with its total investment exceeding 2.7 billion yuan for an annual capacity of 400,000 units. The factory will produce mainly Cummins' light-duty, high-performance 2.8-L and 3.8-L clean diesel engines, which will meet emission standards including Euro IV and China III.

In early August, Daimler AG and Beiqi Foton signed a letter of intent to form a 50-50 trucks joint venture. The deal, if materialized, will help the JV sell medium- and heavy-duty trucks in China and in overseas markets under Foton's Auman brand. The JV is awaiting the government approval and may kick off by mid-2009.

Beijing's future auto industry will carry on the "cultural, technological and green" traditions of the 2008 Beijing Olympics by developing user-friendly, eco-friendly and fuel-efficient own-brand vehicle models, Xu said. It is Chinese auto industry's top priority to make new-energy vehicles to cut emissions and fuel consumption.

By 2010, Beijing Auto, who now has joint ventures Beijing Hyundai Motor Co., Ltd. and Beijing Benz-DaimlerChrysler Automotive Co., Ltd. (BBDC), is expected to reach an annual capacity of 2 million vehicles and annual sales of 1.8 million units with 15% market share (in China).