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Beijing Jeep to Produce Pajero
Beijing Jeep Corp, a joint venture with German auto giant DaimlerChrysler, said it will produce sport utility vehicles for Mitsubishi Motors Corp, marking the first time Japan's No 4 automaker will have its vehicles built in China.

Mitsubishi and Beijing Jeep signed a technical licensing agreement late on Tuesday for the manufacture of the Mitsubishi Pajero Sport, which is scheduled to roll off the assembly line in the first quarter of next year. Annual output is expected to reach 10,000 units.

"The signing not only represents a start for long-term cooperation between us, but a kick-off of a strategic alliance between Beijing Jeep, Mitsubishi and DaimlerChrysler," An Qinghen, chairman of Beijing Jeep, said at a press conference.

DaimlerChrysler, which controls 42.4 percent of Beijing Jeep, owns 37 percent of Mitsubishi Motors Corp.

"We will introduce more products from our partners into China," said An. "Our target is to introduce one new model every year, either from Mitsubishi or DaimlerChrysler."

Mitsubishi Senior Vice-President Steven Torok said the cooperation is a good foothold for Mitsubishi from which to enlarge its presence in China's auto market, one of the world's most dynamic and important markets.

Thomas Hausch, executive director of DaimlerChrysler, said the Pajero will not erode the market of the Cherokee, a major product of the joint venture, because it is priced between the low and high end of the Cherokee.

The deal is a timely boost for Beijing Jeep, which has been producing far below capacity partly due to its inaccurate market orientation, analysts said.

The agreement follows last week's announcement by DaimlerChyrsler and Beijing Automotive Industry Group of a new 30-year contract for the Beijing Jeep joint venture.

An said the joint venture has shrunk its initial incremental investment plan of US$218 million to US$5.2 million because the company has grown very cautious about launching new products.

( June 06, 2002)

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