Daimler, Foton set to sign JV deal for truck business

Shanghai, July 15 (Gasgoo.com) Daimler AG, the world's biggest truck maker, and Beiqi Foton Motor Co., China's biggest commercial-vehicle maker, are set to sign an agreement tomorrow to establish a 50-50 joint venture in China for production of Mercedes-Benz trucks, media reported today.

Reportedly, Daimler and Foton have spent seven years seeking a partnership, with earlier plans for an equity tie-up derailed by Daimler's sale of Chrysler LLC.

Moreover, as early as 2004, the Chinese government promulgated the Automobile Industry Development Policy which mandates that a foreign company can launch no more than two joint ventures which produce the same types of complete vehicles (passenger vehicle, commercial vehicle and motorcycle).

However, Daimler had already established a partnership with Yangzhou Yaxing Motor Coach Co., Ltd. in Jiangsu province and Fujian Automotive Industry Corp in Fujian Province respectively, so Daimler and Foton had to give up the cooperation plan.

Back in 2008, Daimler AG and Foton Motor finally signed a preliminary agreement to form a commercial-vehicle venture in the Chinese capital of Beijing to make Mercedes-Benz medium- and heavy-duty trucks and Mercedes-Benz engines. However, China's regulators have never approved the project until recent days.

It is reported that the new joint venture will produce products of both the Daimler brand and the Foton brand. Daimler also has a venture with Foton's parent, Beijing Automotive Industry Holdings Corp. (BAIC), which makes Mercedes-Benz sedans in the Chinese capital.