Beiqi Foton to finalise Daimler JV after Olympics

Beiqi Foton, a major Chinese truck maker, will finalise a planned heavy-duty truck joint venture with Daimler AG after the Beijing Olympics in August, the chairman of Beiqi Foton's parent company said last Thursday.

Beijing Automotive Industry Holding Co Ltd Chairman Xu Heyi told Reuters the 50-50 venture would make 100,000 heavy-duty trucks per year, to be sold domestically and overseas.

He declined to give financial details of the venture.

Xu reiterated that Beijing Auto, which runs a car manufacturing venture with Hyundai Motor, aims for a domestic initial public offering (IPO) before the end of 2009 to raise more than 2 billion yuan ($290 million).

He added the proceeds would be invested mainly in the development of own-brand vehicles.

After focusing on making foreign-branded cars via tie-ups with overseas partners, many domestic automakers are starting to establish their own brands with models developed in-house, hoping to wean themselves from reliance on foreign technology.

In April, Beijing Auto unveiled its first own-brand sedan, named after the Chinese capital city, with mass production scheduled to start in 2010. 

More Beijing-branded cars will be rolled out in the next few years, targeting the economy and the mid- to high-end market segments, he said.

FAW Group Corp, a China partner of Volkswagen AG and Toyota Motor Corp, plans to spend 13 billion yuan in the next eight years to develop cars under its own brand.

SAIC Motor Corp, which runs ventures with General Motors Corp and Volkswagen, announced a massive bond issue plan last year to fund the development of own-brand cars -- including building plants to produce up to 270,000 sedans and 320,000 engines per year -- at an estimated cost of 21.4 billion yuan.

Xu added that Beijing Auto was also working on clean-energy cars, but they might not be commercially viable in China in the near term. "The problem with clean-energy cars is whether and when you can start mass production," he said.