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Chrysler Group Unveils China Strategy

Source: DaimlerChrysler | Published: Tue Sep 27, 2005

Just two weeks after starting his new role as President and CEO of the Chrysler Group, Tom LaSorda reviewed the Company’s plans in China and Taiwan this week unveiling three product programs representing an investment of $350 million. The Chrysler Group intends to produce Minivans in Taipei and Fuzhou, and the award-winning Chrysler 300C in Beijing all for local markets.

When combined with recently announced projects of DaimlerChrysler, the investment from the company and it's partner for the region now totals $1.5 billion.

But LaSorda's trip focused on the Chrysler Group strategy in the region.

“Chrysler vehicles are known around the world for their combination of eye-catching design and outstanding value,” said LaSorda. “From fashion to architecture to cars, take a look at urban China today and it’s obvious that successfully combining bold design and superior value is a winning formula. Following the success we’ve had growing our business in the hyper-competitive North American and European markets, Chrysler is embarking on a new product offensive for Northeast Asia, led by our new flagship, the Chrysler 300C, along with the world’s most popular minivan, and, of course, the venerable Jeep.”

“Without a doubt, the automotive industry’s greatest potential for growth in the next ten years is in Northeast Asia,” said Dr. Rüdiger Grube, Member of the Board of DaimlerChrysler AG, responsible for Corporate Development and China Operations.

"And DaimlerChrysler intends to be there with a major presence. The Chrysler Group’s plan to add minivan and Chrysler 300C production to the region further complements DaimlerChrysler’s overall strategy to expand production and sales of passenger cars, commercial vehicles as well as vehicle financing".

LaSorda started his Northeast Asia trip on September 14 in Taiwan, reviewing the Company’s previously announced plans to license minivan production with China Motor Corporation (CMC), and create a joint venture between DaimlerChrysler Taiwan and CMC to manage sales and distribution of Chrysler Group vehicles, both for the local market.

The following day in Fuzhou, on mainland China’s southeast coast, he announced the company’s intention to license Southeast Motors (SEM) to produce Chrysler minivans for the mainland Chinese market. SEM is joint venture between CMC and Fujian Motor Industry Group (FJMG). DaimlerChrysler has established a separate joint venture called DaimlerChrysler Vans (China) Ltd. (DCVC) with both FJMG and CMC to produce Mercedes-Benz Sprinter and Viano Multi-Purpose Vehicles at a new facility, also in Fuzhou. Chrysler minivan production will take place at SEM’s existing facility.

During the final stop of his trip in Beijing on September 16, LaSorda announced the intention to build the Chrysler 300C at the new joint venture, BeijingBenz-DaimlerChrysler Automotive Ltd. (BBDCA), for the Chinese market. During the press conference, LaSorda unveiled a giant moon cake, reminiscent of the moon cakes traditionally given for the Chinese Mid-Autumn Festival, which takes place during the full moon on September 18. The moon cake was lifted to dramatically reveal the new Chrysler 300C, the Company’s Mid-Autumn Festival “gift” to the new joint venture.

BBDCA has been operational since its business license was issued last month. The 50:50 joint venture between DaimlerChrysler and BAIC is an expansion of Beijing Jeep Corporation, which produces and sells Jeep and Mitsubishi SUVs. BBDCA will also produce Mercedes-Benz E- and C-Class sedans at a new facility in the Beijing Development Area in the southeast part of the city. The former BJC will relocate from its current site downtown to a new facility adjacent to the new Mercedes-Benz production hall. The Chrysler 300C will be built in a new Chrysler production hall, starting in late 2006 at the new location.

The additional $350 million investment brings DaimlerChrysler and its partners’ total investment in China to $1.5 billion, which includes:

In Beijing, with BAIC, production of Chrysler 300C, Mercedes-Benz E- and C-Class at the new joint venture (BBDCA); relocation of the “former BJC” to the new site, which includes production of Jeep and MMC vehicles; and with Beiqi Foton (in which BAIC has majority ownership), realizing production of medium and heavy duty trucks;
In Fuzhou, with CMC and FJMG, licensed Chrysler minivan production at SEM, and production of Mercedes-Benz MPVs at a new joint venture (DCVC); and
In Taiwan, with CMC, licensed Chrysler minivan production, and creation of a new joint venture for sales and distribution of Chrysler Group products (Chrysler Group Sales Taiwan Ltd.).

The Chrysler Group, which produces and markets Chrysler, Jeep and Dodge brand vehicles, increased worldwide annual sales in August, marking its seventeenth consecutive month of year-over-year sales gains. The company is undergoing its most ambitious product offensive, launching 25 new vehicles in three years. Its product lineup includes: the award winning Chrysler 300C, industry-leading Chrysler Voyager minivans with Stow 'n Go seating, and the venerable Jeep Grand Cherokee, Jeep Commander and Jeep Wrangler, among others. In North America the Chrysler Group also sells Dodge branded vehicles, including the Dodge Charger, Dodge Ram Truck, and of course, the Dodge Viper, among others. Dodge vehicles will soon be available in Europe and additional international markets.

The Chrysler Group is a unit of DaimlerChrysler Group, one of the world’s leading transportation services companies, which builds and markets passenger cars and commercial vehicles with the brands: Mercedes-Benz, Maybach, smart, Chrysler Jeep, Dodge, Freightliner, Setra, Sterling, Thomas Built and American LaFrance. DaimlerChrysler Financial Services is the third-largest automotive captive financial services provider in the world.

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