No 2, BAIC and Daimler's $5.5 billion to expand production
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| Dieter Zetsche (L), Daimler's Chairman of the Board of Management and Xu Heyi, Chairman of the BAIC Group, at the ceremony for strategic cooperation on Feb 1, 2013. [File Photo/Daimler.com] |
Germany's Daimler and Beijing Automotive Industry Corp have earmarked 1 billion euros ($1.37 billion) of a 4 billion-euro China investment plan to more than double car production at their joint venture by 2015.
Daimler said the two companies signed an agreement on the occasion of Chinese President Xi Jinping's state visit to Germany on Friday.
They will invest the money to raise production capacity for the C-class, E-Class and GLK at Beijing Benz Automotive to more than 200,000 cars per year, Daimler said in a statement.
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Daimler declined to detail how much each company would contribute toward the 1 billion euros investment plan.
German automaker Daimler AG in November completed the purchase of a 12-percent stake in its Chinese partner BAIC Motor, the passenger car unit of BAIC Group, becoming the first foreign automaker to hold a significant equity position in a Chinese company.
Under the deal, Hubertus Troska, Daimler AG's management board member responsible for China, and Bodo Uebber, a member of the group's management board and chief financial officer, both have seats at the BAIC Motor board of directors.
The two companies also agreed that BAIC will increase its stake in their production joint venture Beijing Benz Automotive Co by 1 percent to 51 percent.
Daimler will increase its share in newly integrated sales joint venture Beijing Mercedes-Benz Sales Service Co by 1 percent to 51 percent.
Daimler announced in August that it is investing 2 billioneuros ($2.7 billion) in Beijing Benz to make it the largest Daimler production facility in the world by 2015, more than doubling the annual capacity to 200,000 units.
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