Japan's Mitsubishi Motor Corp is in talks with its Chinese partner Southeast Motor Corp, with which it has a technical production licence, to acquire an equity stake in the Chinese mainland-Taiwan joint venture, according to a senior Southeast executive.

Mitsubishi and Southeast, which is a joint venture between Fujian Automotive Industry Corp in the mainland's Fujian Province and Zhonghua Motor Corp in Taiwan Province, hope to clinch a stake deal as soon as possible, according to the executive.

"However, we have to okay the deal with our parent companies first," he said in Beijing.

German-US auto giant DaimlerChrysler AG, which controls a 37.3 percent share of Mitsubishi, has participated in the negotiations between the Japanese company and Southeast, he said.

The official did not reveal what stake Mitsubishi will have in Southeast.

Each of Zhonghua, 25 percent owned by Mitsubishi, and the Fujian auto firm, has a 50 percent stake in Southeast, which was established in 1995.

Southeast started technical licensed production of the Lioncel, a sedan based on Mitsubishi's Lancer in March this year.

The joint venture will launch two new models based on Mitsubishi's Savrin wagon and Veryca mini van during the first half of next year "to take their co-operation to a new level."

Southeast, which is also producing the Delica and Freeca vans, aims to increase its total sales to 100,000 units this year and to 200,000 units by 2005, up from 47,000 units last year.

Mitsubishi Fuso Truck and Bus Corp, which was spun off from Mitsubishi Motor Corp in January and is 43 percent controlled by DaimlerChrysler, said yesterday in Tokyo that it is looking into forming a joint venture with two Chinese vehicle manufacturers to produce trucks in China.

The two expected partners are the Anhui Xingma Automobile Co in East China's Anhui Province and the Beijing Foton Motor Co, a subsidiary of Beijing Automotive Industry Holdings Corp, according to Mitsubishi.

These Mitsubishi projects are seen as part of DaimlerChrysler's overall strategy in China, the world's fastest-growing major vehicle market.

Mitsubishi Motor Corp is also in negotiations with Beijing Jeep Corp to gain an equity stake in the joint venture between DaimlerChrylsler and Beijing Automotive Industry Holdings Corp.

Beijing Jeep is producing Mitsubishi's Pajero Sport utility vehicle (SUV) through a technical licensing deal.

Beijing Jeep will introduce Mitsubishi's Pajero Outlander SUV during the first quarter of next year.

DaimlerChrysler is in final talks with Beijing Automotive Industry Holdings Corp to form a strategic alliance.

The German-US giant will introduce its Mercedes-Benz trucks and passenger cars into an expected joint venture with the Beijing auto firm.

Outside DaimlerChrysler group, Mitsubishi also has a technical licence SUV project in Central China's Hunan Province and an engine project in Northeast China's Liaoning Province.

Changfeng Group in Hunan, an affiliate of the Chinese military, will launch the Feiteng SUV, based on Mitsubishi's IO model this month.

However, Mitsubishi is being sued by Chinese consumers because of an accident in 2000 triggered by a faulty Pajero V73 SUV exported to China.

The company has been asked to pay 2.9 million yuan (US$350,000) in compensation.

Southeast also hopes to create a joint venture with DaimlerChrysler to produce Mercedes-Benz's NCV2, Vaneo and Vito commercial vehicles, according to industry sources.

China's vehicle market is forecast to exceed 4 million units this year and to reach 8 million units by 2010.

All of other world's major automakers, including General Motors, Ford, Toyota, Volkswagen, Honda, Nissan-Renault and BMW have already formed one or more JVs with local partners in China.

(China Daily September 2, 2003)