DaimlerChrysler and Beijing Automotive Industry (Group) Company announced today that they would invest a total of US$ 226 million to restructure the joint venture, Beijing Jeep Corporation.
A Memorandum of Understanding, signed by both parties, includes the revamping of the joint venture's management structure along with the introduction of two new models within three years.
Beijing Jeep Corporation became China's first automotive joint venture when it was established in May 1983. Over the past seventeen years, the joint venture has introduced many advanced technologies and quality standards to China's automotive industry while introducing Jeep Cherokees and other products for the local market. Beijing Jeep products have steadily improved in quality and reliability over this period.
The new injection of capital, new management and technology proposed by the two partners will provide the company with the boost necessary to ensure its future competitiveness. As the present joint venture agreement nears the end of its term, the two partners are completing the agreement for the next phase of cooperation.
The agreement calls for eventual localization of Beijing Jeep management. Modern management training programmes along with a performance evaluation system for all employees will be put in place to ensure that this goal is attained.
Pending timely approval of the MOU, new products including the latest model Grand Cherokee, and the BJ2 will be introduced by the end of the year and in 2002 respectively. The Grand Cherokee will be a genuine Jeep brand product, while the BJ2 will be locally designed and produced with 100 % local content. The BJ2 will hold the distinction of being the first fully new automotive product jointly developed by a joint venture in China specifically for the Chinese market. The model also opens up possibilities for export markets.
The agreement calls for the programme to be implemented within 2002, with further plans commencing in 2003 when new product models will be considered for the Chinese and other markets.
Renewal of the joint venture signals DaimlerChrysler's long-term commitment to and further investment in China, and complements the company's overall Asian Strategy to build up a presence in Asia.