Chinese truck maker Beiqi Foton is to set up a wholly-owned subsidiary in Russia as part of its overseas expansion efforts, the company said on Thursday.
The subsidiary, with US$2 million registered capital, will focus on purchase and sales of automobiles, engineering machinery, internal combustion engines and auto parts, China Business News reported, citing a company insider.
It is the first international cooperation between the Beijing-based truck maker and German automaker Daimler AG, after the two signed an agreement in August to jointly explore the global commercial vehicle market.
"It would be easier for a Chinese brand to go overseas through cooperation with a world renowned auto maker," said the insider. "Chinese enterprises are not approved to set up plants in Russia, but the situation would be better if we join hands with big names like Daimler."
Russia's fast-growing market is strategic for Chinese auto makers to beef up their presence in Central and Eastern Europe, though the process is somehow frustrating due to trade barriers.
Foton expects to make substantial profits in Russia from 2011, when sales in the country are expected to rise sharply.
(China Daily December 6, 2008)
