Bejing Jeep Poised for a Comeback?

Date 2000/9/29 0:00:00 | Topic: Facilities


Yahoo! News is reporting that DaimlerChrysler and its Chinese business partner is trying to revive the ailing Bejing Jeep division by investing over $200 million and introducing a new Jeep model in China for the first time in 15 years. Here's a snippet:

Facing the prospect of stiffer competition as China moves to join the World Trade Organization, the joint venture will try to attract increasingly affluent Chinese consumers by producing two new sport utility vehicles by 2002, the companies said in a statement.

Its two current products are also SUVs, one a model of DaimlerChrysler Cherokee introduced in 1985 and the other an even older, Soviet-influenced design.

``With dynamic market conditions in China and around the region, it is imperative to refresh our products and install a modern management system ... especially as we anticipate China's accession to WTO,'' the joint statement said.

DaimlerChrysler, which owns 42 percent of the joint venture, will pitch in $50 million; partner Beijing Automotive Industry Corp., which owns the rest, will add another $68 million, the two companies said.

The remaining amount will come from loans or directly from Beijing Jeep.

Most of the money will be used to build factory lines for the new models and modernize existing lines. Some will also go to unspecified steps to streamline operations, the statement said.

When launched in 1983, Beijing Jeep was a symbol of China's economic opening to the world. But it has fallen on hard times recently, as competitors like General Motors and Volkswagon have offered more up-to-date models.

Competition is also set to get fiercer as China opens its markets to foreign-made cars ahead of joining WTO.

Beijing Jeep sold just 21,000 vehicles last year - a quarter of what it sold five years ago. It has been in the red the last two years, losing 80 million yuan (about $10 million) last year.

For more information on Bejing Jeep and its origins, check out Bejing Jeep: A Case Study of Western Business in China.





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