BAIC Seeks to Buy Fujian Motor's Stake in Daimler JV

By Liang Dongmei

Beijing Automotive Industry Holding Corp.(BAIC) is in talks to buy Fujian Motor Industry Group Co.'s 50 percent stake in a Daimler AG joint venture, a Beijing Auto official told Caijing Wednesday.

The bid for the joint venture stake underscores Beijing Auto's ambition to expand. It is also one of three bidders for General Motors' Opel brand, offering 660 million euros for a 51 percent stake. 

The Beijing and Fujian governments are participating in the talks, the Beijing Auto official said. Beijing Auto, owned by the Beijing municipal government, is China's fifth largest automaker. The joint venture makes Mercedes Benz vehicles in the southern province of Fujian.

Fujian Motor launched the 249 million euro joint venture with Daimler and Taiwan's China Motor Corp in May 2007. Daimler has a 34 percent stake in the venture, and China Motor 16 percent. The factory produces the Mercedes Benz NCV (New Concept Vehicle) Series II and III, with annual output of 40,000 units.
 
Daimler is enthusiastic about the deal, with a senior manager at Daimler's Northeast Asia unit telling Caijing that the transaction is expected to be positive for the world's second-largest luxury-car maker.

A successful purchase would mean an expansion of Beijing Auto's ties with Daimler. In January 2009, a Beijing Auto subsidiary, Beiqi Foton (SHA 600166), signed a deal with Daimler to exchange technology and jointly produce medium- and heavy-duty trucks.

In May, Beijing Auto canceled a plan to buy a stake in Hunan Changfeng Motor after it judged the transaction to be too expensive.