Daimler's China venture breaks even for first time

Daimler AG, the world's second-largest luxury-car maker, said its car venture in China broke even last year for the first time, helped by the country's rising demand for premium sedans.

"Last year was the first year that we achieved break even," Ulrich Walker, the company's chairman for northeast Asia, said at a briefing in Shanghai on July 21, without elaborating. "I am very optimistic" about sales growth in the second half.

Rising affluence in the world's fastest-growing major vehicle market is benefiting Daimler, Bayerische Motoren Werke AG and other luxury carmakers. Daimler's sales of Mercedes-Benz cars in China rose 50 percent from a year earlier to a record 27,000 units in the first half of this year.

Daimler, which started its car venture with Beijing Automotive Industry Holding Co. four years ago, will begin making a new E-class sedan at their factory in Beijing in October, said Walker, without providing a sales target.

Daimler was added to China's government procurement list last month. The Chinese government plans to cut spending on vehicles by 15 percent this year from the average for the past three years, the procurement agency said in a June 15 statement. It spent 80 billion yuan ($11.7 billion) on official vehicles last year.