Diamler has secured clearance from Chinese government for a truck joint venture, as the world’s vehicle makers look to China for growth amid a global economic slump, Economic Times reported.
A unit of the German automaker, Daimler Truck, will hold a 50% stake in the venture, which would have annual production capacity of 160,000 trucks, Daimler said.
Beijing-based Foton Motors, the Chinese partner in the joint venture, is a unit of industry giant Beijing Automotive Industry Corporation.
“This is an important step for the global growth strategy of Daimler, as well as the local expansion of our portfolio,” Diamler chairman Dieter Zetsche said.
The Daimler group includes the Mercedes-Benz brand. The deal will give Daimler a 50% stake in Foton’s medium and heavy truck business.
The joint venture will also move towards localized production of a truck engine developed by Mercedes Benz. The company did not provide financial details of the agreement.
Both the companies signed a joint venture agreement in July last year, but the deal was subject to approval by China’s ministry of commerce.
China has become a very important auto market after it overtook the United States 2 years ago to become the world’s largest. Last year, China’s auto sales grew more than 32% to a record of more than 18 million vehicles.
Diamler is a German automaker and is one the biggest producers of premium cars and world’s biggest manufacturer of commercial vehicles with a global reach.
The company has its divisions like Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services.
With the development of alternative drive systems, Daimler is the only vehicle producer investing in all three technologies of hybrid drive, electric motors and fuel cells, with a goal of achieving emission free mobility in the long-term.