German-US auto giant DaimlerChrysler AG will introduce sedans from its US unit Chrysler to its joint venture (JV) with the Beijing Automotive Holdings Corp.

The JV, known as the Beijing Jeep Corp, plans to assemble Chrysler sedans within the next three to four years, according to Paul Alcala, the venture's chief executive officer.

"We will introduce models of our new-generation platform shared by Chrysler and MMC (Mitsubishi Motor Corp)," Alcala said at the weekend.

The models will go up against Volkswagen's Passat and Honda's Accord, he added.

Beijing Jeep now makes sport utility vehicles (SUVs), including Chrysler's Grand Cherokee and Jeep 2500, and the Pajero Sport of MMC - the Japanese automaker that is 37 per cent owned by DaimlerChrysler.

Alcala revealed the plan on Saturday when the JV opened a new sales, after-sales service and spare parts outlet with a local partner, Beijing Ganglong Motor Sales and Service Co Ltd.

The plan is seen as part of a much-anticipated overall alliance between DaimlerChrysler and the Beijing Automotive Holdings Corp.

The two sides are in final negotiations to form the alliance, said An Qingheng, chairman of the Beijing auto firm.

"We will further discuss details of the alliance this week in Beijing," An told China Daily yesterday.

"But right now, I can not tell you when we will clinch the deal."

An said earlier that DaimerChrylser's Mercedes-Benz will produce its sedans in Beijing in collaboration with the Beijing auto firm before 2008.

DaimlerChrysler is the world's only major automaker that does not have a project to make its own-brand sedans in China.

Mercedes-Benz will also form a JV with Beiqi Futian, an affiliate of the Beijing auto firm, to manufacture its trucks, according to company sources.

Mercedes-Benz abandoned negotiations with the First Automotive Works Corp - China's biggest automaker - for a truck JV at the beginning of the year because it was unwilling to have a minor stake.

Beijing Jeep plans to build 60 sales and service outlets in China by the end of 2003 to facilitate its expansion in the nation's booming SUV market, said Weiming Soh, sales and marketing director of the JV.

The outlets will market both imported and domestically made SUVs from MMC and Chrysler.

The JV aims to increase its sales to 20,000 units this year and up to 40,000 units next year, from 10,000 units last year, Soh said.

"SUVs will account for 25 per cent of China's total passenger vehicle market by 2007, up from less than 10 per cent at present," he said.

He predicted that China's SUV market this year will reach 150,000 units.

Beijing Jeep, which has vowed to introduce at least a new model every year, plans to produce MMC's Pajero Outlander during the first quarter of next year.

Many other foreign automakers, such as General Motors and Toyota, also have plans to introduce new SUV models to their Chinese JVs this year.
(China Daily July 28, 2003)