Foton-Daimler venture to explore global market

Shanghai, February 17 (Gasgoo.com) Chinese truck-maker Beiqi Foton Motor and Germany's Daimler AG, the world's commercial vehicle giant, signed a 50:50 truck venture deal on January 29. The Foton-Daimler company will focus on exploring the global markets, said Beijing Times today, citing a Foton executive.

In August 2008, the two companies signed a letter of intent to establish a joint venture named Beijing Foton Daimler Automotive Company to make trucks. They clinched the deal last month amid the financial crisis. The formal contract will be inked in June after the venture project gets regulatory approval. The envisaged venture's site has now passed the environmental assessment, and construction of the facility will start soon.

The joint venture Beijing Foton Daimler Automotive Co., with a total investment of 6.35 billion yuan ($930 million), will start producing diesel engines in 2011 and trucks in 2012, with an annual capacity of 100,000 trucks. The Mercedes vehicles may be also made in the venture. Foton's parent, Beijing Automotive Industry Holdings Corp, already assembles Mercedes sedans in the joint venture Beijing-Benz Daimler Auto Co.

An overseas business executive of Foton Motor said that Beijing Foton Daimler Auto will focus on exploring the global markets and making trucks for exports. The joint venture company will also build up manufacturing facilities and sales networks in Russia, Indonesia and Brazil first. Foton Motor is mulling overseas acquisitions as one of its plans in 2009.

In 2008, Foton Motor exported 29,800 vehicles and aims to export 40,000 units this year. By 2015, over 30% of Foton's sales target of 1.5 million vehicles will be achieved by its sales in the global markets, the executive said.