This month, DaimlerChrysler renewed its joint-venture pact for another 30 years, to 2033, and the partners have begun several initiatives to jump-start Beijing Jeep.
Mitsubishi Motors Corp. will begin assembling the Montero Sport sport-utility at the venture. Production is to begin in the first quarter of next year, with first-year output estimated at about 10,000. Beijing Jeep and Mitsubishi also expect to create a joint distribution venture to sell and service the sport-utility.
DaimlerChrysler owns 37.3 percent of Mitsubishi and 42.4 percent of Beijing Jeep.
"This will create greater chances for Beijing Jeep to regain its competitive edge and resume profitability," Beijing Jeep Chairman An Qingheng said in a statement.
Late last year, the partners added the Jeep Grand Cherokee to the plant's output, the first new model in 17 years.
In September 2000, the partners announced plans to invest $226 million to retool the venture for new models, including the Grand Cherokee, a replacement for the BJ2020, and unnamed other products.
Now DaimlerChrysler says it will invest "substantially more" than that $226 million over the next 30 years. But in the near term, the amounts may be lower than predicted, as Beijing Jeep seeks "more products for less money than planned one year before," Hausch said.
Beijing Jeep's partners plan to invest $52 million "in the near future" to finance partially the development and introduction of the Pajero Sport and a second new model for the Chinese market, Hausch said in an e-mail reply to written questions.
Plans for a replacement for the BJ2020 are not final, he said.
"Additional substantial investment" also will come from Mitsubishi, in part to tune the Pajero for the Chinese market, he said.
Beijing Jeep's plans so far don't include Hyundai Motor Co., also an affiliate of DaimlerChrysler.
Instead, Hyundai and Beijing Automotive have agreed to build a plant to assemble cars starting this year. Hyundai's ambitious plans call for investing $430 million to create capacity for 200,000 cars by 2005, and $1.1 billion for 500,000 cars by 2010.
DaimlerChrysler owns 10 percent of Hyundai, but executives at DaimlerChrysler and Mitsubishi said they are not playing any role in Hyundai's plans.
The Beijing-built Pajero will be the first Mitsubishi-branded vehicle built in China, but it will not mark Mitsubishi's debut in the Chinese market. Through licensing and other arrangements, it has ties to four vehicle-assembly projects and two engine plants in China.
But as the Beijing Jeep deal becomes its showcase project, "We'll be looking at our various partners to see how they could be integrated," said Steven Torok, Mitsubishi senior vice president for international car operations.
Beijing Jeep's future is not assured; competition in the niche sport-utility market is getting tougher. General Motors, for example, has found that demand for its locally produced Blazer has fallen short of forecasts.
"The numbers weren't as good as we'd like, but that segment was the only one (in China) to decline last year," said GM China President Philip Murtaugh.
"There are almost 70 competitors in one of the market's smallest segments, and imports account for roughly half the segment," he said.
Sales of high-end sport-utilities such as the Jeep Cherokee and Chevrolet Blazer, as distinct from the workhorse BJ2020, have hovered around the 20,000 to 30,000 range for several years even as other segments grew, said Yale Zhang, a Beijing-based analyst for Automotive Resources Asia Ltd.
And he doesn't expect the segment to grow any time soon.
"The sport-utility concept is not as popular in China as it is in the West," he said. "People don't yet buy an SUV to replace a car. Only people who need to go off-road will buy one."