SHANGHAI - DaimlerChrysler AG has applied for approval to produce Mercedes cars in China with partner Beijing Automotive Industry Holdings Corp., an executive for the Chinese company disclosed last week.
"We want to produce passenger cars, but we haven't worked out any of the details yet," said the executive, who asked not to be named. "I don't know when we might sign an actual contract. We have to get the approval first."
DaimlerChrysler's China operations did not respond to a request for comment, but a spokesman in Germany said the automaker envisions assembling about 20,000 Mercedes cars a year in China. He did not identify models being considered.
Beijing Automotive and DaimlerChrysler are 50-50 partners in Beijing Jeep Corp., which assembles two variants of the Jeep Grand Cherokee, the Mitsubishi Pajero Sport and a locally developed SUV named the Jeep 2500.
Government approval can take years in China, which could cost Mercedes dearly in this fast-growing market.
BMW, its main luxury competitor, will begin producing 3- and 5-series sedans this year in a joint venture with Brilliance China Automotive.
China's new-car sales last year grew 56 percent over 2001 to more than 1.2 million units. Although sales of luxury models priced above 1 million yuan, or $120,800, accounted for only about 10,000 units of last year's total market, the segment is expected to grow 15 percent to 25 percent a year for the next few years, says Andreas Deges, Audi China executive director.
Mercedes-Benz and BMW long have epitomized luxury to Chinese consumers. Their names translate into Chinese, respectively, as "to gallop" and "treasure horse."
But in a market where individual drivers rather than government officials are fast becoming the main car buyers, the Mercedes brand will have to overcome an image as the best car to be chauffeured around in rather than to drive. Consumers here have a saying: "Sit in a Mercedes, drive a BMW."
DaimlerChrysler makes Mercedes buses at a joint venture in east China and trucks in northern China. In addition, the Chinese press has reported that the automaker is considering a venture to make trucks with an affiliate of Beijing Automotive.