The renowned German weekly, Star, recently quoted an inside information from Daimler-Chrysler as saying that Daimler-Chrysler is planning to withdraw from China.

The report said Daimler Chrysler was considering a complete withdrawal of its Beijing Chrysler Jeep from the Chinese market and a cut-down on the market share of its jointly financed bus factory based in Yangzhou.

Although Daimler-Chrysler-invested enterprise in China told reporters that related reports were groundless, sheer fabrications, and stressed its commitment to China, facts show that Daimler-Chrysler does face problems in China.

Daimler-Chrysler's executive vice-president noted this March that they would strive to prolong its cooperation with Beijing Jeep for another 30 years, adding that they would provide a full range of products and introduce the most up-to-date pattern of vehicles, so as to ensure success in their long-term cooperation with Beijing Jeep.

Exploring new opportunities for development

It is the general view of the insiders that compared with other producers, Daimler Chrysler is obviously behind because it has kept its investment in China unchanged for a dozen years and more. It has no other production base except Beijing Jeep. Therefore, for Daimler-Chrysler, giving up Beijing Jeep means losing all opportunities in China.

The predicament hindering Daimler Chrysler's development in China compels the company to expand its business toward the field of commercial vehicles, it seems that the current most effective way is to purchase and merge the transport vehicles manufacture departments of Mitsubishi.

Daimler-Chrysler told reporters that it is integrating and optimizing resources to make maximum use of the advantages of such merger.

Another news from the company has proved that it has planned to be the biggest shareholder of Mitsubishi in 2003 and then take over the latter.

Mitsubishi's debts amount to 1.3 billion euros and it urgently needs external aid. Purchasing the transport vehicles manufacture departments of Mitsubishi by Daimler-Chrysler can help Mitsubishi repay its debts and ease the years-old debt crisis. However, Mitsubishi is likely to be a heavy burden on Daimler-Chrysler because Mitsubishi holds a 37.4 percent share.

( May 17, 2002)