Daimler has signed a letter of intent to produce medium and heavy-duty trucks in China in a deal reportedly worth RMB2bn (US$290m).
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Daimler will form a 50-50 joint venture with Beiqi Foton Motor to produce and sell Foton’s Auman brand trucks with Mercedes-Benz engines, Daimler told Agence France-Presse (AFP).
The joint venture, which expects to win government approval within a year, will explore opportunities to sell the trucks in international markets, primarily in developing countries, a spokesman told AFP, declining to provide any financial details.
AFP said the 21st Century Business Herald reported it may involve a total investment of 2bn yuan, with Foton providing cash, land and production facilities and Daimler technology and cash.
“Today’s agreement is a milestone in the commercial vehicle industry,” Ulrich Walker, chairman of Daimler Northeast Asia, said in the statement.
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By GlobalData“Daimler’s technology expertise, global scale and leadership in the high-end truck segment complement Foton’s broad distribution in China and leadership in the lower-end truck segment.”
AFP noted that the deal came after Shanghai-listed Foton Motor scrapped plans to sell a 24% stake in Daimler late last year after failing to win government approval.
The joint venture with Beiqi Foton, the largest commercial vehicle manufacturer in China, will be the second commercial vehicle partnership Daimler has in the country, according to the statement.
Fujian Daimler Automotive, a JV with Fujian Motor and China Motors , will begin producing Mercedes-Benz vans next year.
Daimler also has a joint venture with Foton’s parent, Beijing Automotive Industry Holdings, which makes Mercedes-Benz sedans, AFP noted.
