Daimler Signs A Deal with BAIC US$2.87 billion

The picture may seem familiar: Chinese and German businesspersons on the same table signing some papers, while German Chancellor Dr. Angela Merkel, and Chinese Prime Minister Wen Jiabao, standing behind them with their country flags are floating in the background.
Only this time the Germans are Daimler’s executives, not Volkswagen’s, and the other signatory is BAIC (Beijing Automotive Industry Corporation).
The deal involves Daimler investing $2.87 billion (€2.0 billion) to expand its operations with BAIC, called Joint Venture Beijing Benz Automotive Co, Ltd.
"As early as 2020, at least one in five premium compact cars is expected to be sold in China," Daimler CEO Dieter Zetsche said. So it makes perfect sense for the company to expand its activities in the local market.”
This year, the GLK SUV will be added to Mercedes-Benz’s Chinese range and production of theC-Class and E-Class, which is currently 80,000 units per year, will increase according to demand.
In addition, from 2013 three new (yet unspecified) premium compact cars will be added to the luxury carmaker’s China market range. In the same year, a new engine factory with annual capacity of up to 250,000 units will produce 4-cylinder gasoline engines for the local market and a new R&D center will be established.

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Chrysler Seeks Fiat Synergies to Start Cars Production In China

China is the world’s largest car market: last year alone, more than 18 million vehicles were sold there, of which 13.76 million were passenger cars. Furthermore, analysts McKinsey & Company predict that it will grow tenfold between 2005 and 2030.

Do you want to know Chrysler’s share in this massive car market? A measly 31,000 in 2010 and a projection for just 40,000 in 2011. Therefore, it is only natural that the American carmaker is looking for ways to increase its share in this rapidly expanding market.

Problem is, you just don’t walk into China and start building cars: “To find a partner, negotiate, get government approval, build a plant – that’s a long time” Mike Manley, head of Chrysler’s international operations told Reuters news.

But, according to Manley, Chrysler already has a way to get rid of all that fuss and make things happen quickly: “Fiat are already through that”.

Fiat Spa, who manages Chrysler and is sharing technologies and models, has since 2009 established a joint venture with GAC, the country’s sixth biggest carmaker, to build cars in China.

"If there's an opportunity for us in the same way as we've done with Fiat in terms of technology or using their distribution, our speed to market is going to be so much quicker," Manley said, adding that if Chrysler, or rather Jeep, wants to succeed in the competitive small SUV market, it would have to build them in China.

Jeep is already planning to launch the Compass and Grand Cherokee models in China, while Chrysler is examining the possibility of importing the 200 and 300 sedans from the United States.

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New Chinese Order Saab with a Temporary Lifeline

Maybe the future of Saab isn’t as dark as it looks, and the voluntary bankruptcy proposed by suppliers isn’t the only solution. Well, at least for now. That’s because the Swedish automaker announced today that an unnamed Chinese company place an order to buy 582 cars, with a total value of € 13 million.
The pre-payment is to be received this week, giving Saab a much needed funding to pay its workers and suppliers. This, however, is only a short-term lifeline for the ailing company and the efforts to secure funds that will guarantee the brand’s future and restart production, which has been halted again since June 8, are ongoing.

Victor Muller, CEO of Saab Automobile, said:

"I am pleased to announce this agreement, as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees' wages before the end of this month. The management of Saab Automobile is deeply committed to the company and its employees. I respect the decision of the union members to resign from the board of Saab Automobile. We very much regret the current cash shortage, which is causing undeserved hardship to all, and we are working relentlessly to resolve the current situation. We hope to secure additional short-term funding, necessary to reach agreement with all of our suppliers to restart production, soon.”
“Mr. Vladimir Antonov's interest in participating as an investor/financier in Swedish Automobile remains unwavering, but he is still awaiting a decision on his clearance from parties at interest following the Swedish National Debt Office (NDO) recommendation to clear him over 8 weeks ago. Once clearance has been obtained, Mr. Antonov can provide much needed financing and/or capital to Swedish Automobile/Saab Automobile at this critical time. We are pushing hard to obtain this vital clearance as soon as practically possible.”

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