BEIJING – Daimler’s truck joint venture with Beiqi-Foton Motor Co., Ltd. (Foton), Beijing Foton Daimler Automotive Co., Ltd. (BFDA), received final approval from the Ministry of Commerce (MOFCOM) on September 20, according to statements released by both companies on September 26.
The approval for the 50:50 JV comes after nearly nine years of discussions between the two partners and business license is expected by the end of October. The JV agreement was signed in July 2010.
BFDA has a total investment of ¥6.35 billion ($985 million) and registered capital of ¥5.6 billion. Foton will contribute its current Auman truck assets, valued at ¥2.8 billion, while Daimler will contribute the remaining in cash. The JV project is signed for 50 years.
Daimler will contribute its technological expertise to the joint venture – especially in the area of diesel engines and exhaust gas systems – so that Chinese emissions limits, ranging up to the Euro V standard, can be fulfilled. Localized production of Mercedes-Benz’s redeveloped OM457 engines will be an integral part of future operations at the joint venture. Annual output capacity of Auman heavy-duty trucks will be 100,000 units and OM457 engines 45,000 units.
Foton has experienced rapid growth since entering the truck business in 1998. Last year it sold nearly 105,000 medium- and heavy-duty trucks (and nearly 66,500 units during the first half of 2011). In late August, Foton celebrated its 15-year anniversary by producing the 5 millionth vehicle since its establishment in 1996.
A second truck plant is already being ramped up, giving BFDA a total production capacity of 160,000 trucks.