Beijing Benz

Beijing Benz - Daimler Chrysler Automotive Co Ltd (Chinese: 北京奔驰汽车有限公司) is a Chinese car manufacturer. It is also known as BBDC,[1] but as its legal name may have recently been changed to Beijing Benz Automotive Co Ltd, BBAC may now be the preferred acronym.

A joint venture co-owned by German Daimler AG and Chinese Beiqi,[2] the company has kept the same Chinese owner but had several other foreign partners prior to Daimler. BBDC assembles and manufactures the Mercedes-Benz E-Class and C-Class in China.[3] These will soon be joined by the GLK-Class.[4] While BBDC does not produce all the Mercedes-branded autos sold on the Chinese market, such cars currently enjoy a reputation for high quality and popularity.[5] Some Mercedes offerings, the S-Class for example, are imported by Mercedes-Benz (China) Ltd.[6] Mercedes Benzes are, alongside FAW Group Audis, Brilliance Auto BMWs, and Lexuses, some of the only Western luxury cars to have gained popularity in the Chinese market.[7]

Sales in 2010 were expected to reach 50,000 cars,[8] but total Mercedes Benz sales in China including imports were near 150,000.[4] In 2008 production capacity at BBDC was estimated at 100,000 units/year,[9] but such figures may consider engines and vehicles as discrete. The company was likely able to produce only half that number of whole vehicles.

Contents

History

While its history can be traced back to the oldest of the Chinese auto-making joint ventures with a Western partner, BBDC was established in 2005 and is currently owned by Beiqi and Daimler AG.[10]

American Motors

Beijing Benz's origins begin with the Beijing Jeep Corporation (Chinese: 北京吉普汽车有限公司), which became China's first Sino-western automotive joint venture when it was established in 1984[11] with American Motors Corporation.[12][13][14]

American Motors began negotiations in 1979 to sell its vehicles in China and to gain access to then low-cost Chinese labor.[15] The Chinese wanted access to more-modern automotive technology; Beijing Jeep suited the needs of both parties and produced the American Motors Jeep Cherokee (XJ) in Beijing.[15] Almost six years after talks on the joint venture had begun the first Jeep Cherokee rolled off the assembly line on 26 September 1985.[16] Assembly of the Cherokee continued after Chrysler's buyout of American Motors as did production of the classic Beijing BJ212-based SUVs.[15] Beijing Jeep has since become emblematic as a case study of early FDI in China.[17][18][19] These studies typically compare the marketing strategies of Beijing Jeep and Shanghai Volkswagen.[20][21]

Chrysler

Chrysler's purchase of American Motors and its Jeep brand came with an unexpected boon, Beijing Jeep. A few Chrysler models were subsequently added to the Chinese company's product line including Jeep Grand Cherokee, Mitsubishi Pajero Sport, and Mitsubishi Outlander, as well as some Beijing Jeep-branded, locally-developed vehicles. Chrysler left the joint venture in early 2009.[22] Production of newer Jeep models in China is planned to resume in 2011 with a joint venture between Guangzhou Automobile Group and Fiat.[23]

Daimler AG

During Chrysler's short-lived partnership with Daimler AG, maker of Mercedes-Benz cars, it was decided that the American company's Chinese joint venture would produce Mercedes-Benz-branded products. Beijing Jeep became Beijing Benz-DaimlerChrysler Automotive Co Ltd,[11] and while Chrysler was removed from the company in 2009, it remained in its legal name.[22] Then German Chancellor Gerhard Schroeder was a presence at the 2004 naming ceremony.[11]

The company started producing the Mercedes-Benz E-Class locally in 2006 and the C-Class in 2008.[4] Manufacture of Chrysler-branded models continued until at least 2008.[9] This included the 300C, which was both locally produced and imported.[24]

Prior to 2010 the E-Class may have been assembled from knock-down kits, and the localization rate for production was a scant 30%.[25] The component localization rate will rise to 70% and production capacity will increase to 100,000 units/year.[26]

Government procurement

As of 2009 Beijing Benz products, alongside those of several other makes, are purchased for use by Chinese State officials such as ministers and provincial heads.[27] A First Automobile Works Audi is the traditional choice for this purpose.[27]

Models

Current

Past

Factories

Beijing Benz has a production base at the Beijing Economic & Technological Development Area.[30] Another plant opened in 2010.[8] This opening may have increased potential Beijing Benz production capacity to 300,000 units/year.[9] Such unit counts may consider engines and automobiles as discrete. A future engine-making production base is scheduled to become operational in 2013.[4]

See also

References

  1. ^ "Daimler Northeast Asia". Mercedes Benz China. http://www.mercedes-benz.com.cn/content/china/mpc/mpc_china_website/enng/home_mpc/passengercars/home/passengercars_world/about_company/daimler.html. Retrieved 9 March 2011. 
  2. ^ "2009 Annual Report, 2. Significant acquisitions and dispositions of interests in companies and of other assets and liabilities". Daimler AG. http://ar2009.daimler.com/en/consolidated-financial-statements/notes/2-significant-acquisitions-and-dispositions-of-interests-in-companies-and-of-other-disposals-of-assets-and-liabilities.html. Retrieved 9 March 2011. 
  3. ^ For assembly of vehicles, see "2009 Annual Report, 34. Related Party Relationships". Daimler AG. http://ar2009.daimler.com/en/consolidated-financial-statements/notes/34-related-party-relationships.html. Retrieved 9 March 2011. 
  4. ^ a b c d "Daimler Expands Activities in China". Daimler AG. 28 June 2011. http://www.daimler.com/dccom/0-5-7171-1-1404186-1-0-0-0-0-1-8-7164-0-0-0-0-0-0-0.html. Retrieved 24 July 2011. 
  5. ^ "Motoring: Short Torque". China Daily. 20 December 2010. http://www.chinadaily.com.cn/cndy/2010-12/20/content_11724308.htm. Retrieved 9 March 2011. 
  6. ^ "Mercedes-Benz S-Class is a leader in innovation". Global Times. Shanghai Daily. 1 September 2010. http://www.globaltimes.cn/www/english/autos/auto-china/industry/2011-01/569088.html. Retrieved 9 March 2011. 
  7. ^ Shirouzu, Norihiko (7 June 2011). "Chinese Begin Volvo Overhaul". Wall Street Journal. http://online.wsj.com/article/SB10001424052702304563104576363041069364856.html. Retrieved 27 August 2011. 
  8. ^ a b Zheng, Amanda (6 December 2010). "Beijing Benz 2010 sales expected to hit 50,000 units, up 179%". Automotive News (gasgoo.com). http://autonews.gasgoo.com/china-news/beijing-benz-2010-sales-expected-to-hit-50-000-uni-101206.shtml. Retrieved 9 March 2011. 
  9. ^ a b c "BBDC Improves Budget Management and Keeps Pace with Fast-Changing Automotive Market". oracle.com. November 2008. http://www.oracle.com/customers/snapshots/beijing-benz-daimlerchrysler-automotive-hyperion-case-study.pdf. Retrieved 9 March 2011. 
  10. ^ For pedigree, see Qiao, Yu (7 December 2004). "JV renamed Beijing Benz-DaimlerChrysler". China Daily. http://www.chinadaily.com.cn/english/doc/2004-12/07/content_397951.htm. Retrieved 9 March 2011. 
  11. ^ a b c Qiao, Yu (7 December 2004). "JV renamed Beijing Benz-DaimlerChrysler". China Daily. http://www.chinadaily.com.cn/english/doc/2004-12/07/content_397951.htm. Retrieved 9 March 2011. 
  12. ^ Qiao, Yu (7 December 2004). "JV renamed Beijing Benz-DaimlerChrysler". China Daily. http://www.chinadaily.com.cn/english/doc/2004-12/07/content_397951.htm. Retrieved 9 March 2011. 
  13. ^ Mann, Jim (1997). Beijing Jeep: A Case Study of Western Business in China. Westview Press. ISBN 9780813333274. http://books.google.com/books?id=zss6RUl6UDYC&lpg=PP1&dq=beijing%20jeep%20a%20case%20study%20of%20western%20business%20in%20china. Retrieved 9 March 2011. 
  14. ^ China shifts gears: automakers, oil, pollution, and development Page 47 Kelly Sims Gallagher - 2006 "China's First Experiment with a Foreign Joint Venture Beijing Jeep Corporation (BJC) was the ... The pioneering spirit once associated with Beijing Jeep flagged during the 1990s, and the joint venture ..."
  15. ^ a b c Mann, Jim (1997). Beijing Jeep: A Case Study of Western Business in China. Westview Press. ISBN 9780813333274. http://books.google.com/books?id=zss6RUl6UDYC&lpg=PP1&dq=beijing%20jeep%20a%20case%20study%20of%20western%20business%20in%20china. Retrieved 9 March 2011. 
  16. ^ Doing business in China: the last great market - Page 192 Geoffrey Murray - 1994 "BEIJING JEEP Finally in this chapter, I want to return to the ongoing story of Beijing Jeep. When the first Cherokee rolled off the assembly line on 26 September 1985 - almost six years after talks on the joint venture had begun - an ..."
  17. ^ Needle, David (2010). Business in Context: An Introduction to Business and Its Environment (5 ed.). Cengage Learning EMEA. pp. 42–44. ISBN 9781844806133. http://books.google.com/books?id=kJsDgcqM6tcC&lpg=PP1&dq='Business%20in%20Context&pg=PA42#v=onepage&q&f=false. 
  18. ^ Baker, Kevin James (2007). "The Beijing Jeep and the Threat from China". Economic tsunami: China's car industry will sweep away western car makers. Rosenberg Publishing. pp. 51–63. ISBN 9781877058561. http://books.google.com/books?id=x7reX_AWz48C&pg=PA51&dq=Economic+tsunami:+China's+car+industry+will+sweep+away+western+car&source=gbs_toc_r&cad=4#v=onepage&q&f=false. Retrieved 27 August 2011. 
  19. ^ Ahlstrom, David; Bruton, Garry D. (2009). International Management: Strategy and Culture in the Emerging World. Cengage Learning. p. 164. ISBN 9780324406313. http://books.google.com/books?id=HqUZ-aeWENIC&lpg=PP1&dq='International%20Management%3A%20Strategy%20and%20Culture%20in%20the%20Emerging%20World&pg=PA164#v=onepage&q&f=false. 
  20. ^ Gu, Zhibin; Frank, Andre Gunder (2006). China's global reach: markets, multinationals, and globalization. Fultus. pp. 84–86. ISBN 9781596820937. http://books.google.com/books?id=ds9XjOmOYcgC&lpg=PP1&dq=China's%20global%20reach%3A%20markets%2C%20multinationals%2C%20and%20globalization&pg=PA84#v=onepage&q&f=false. 
  21. ^ McGunagle, Doreen M. (2007). Romancing the big dragon: The impact of foreign entry into the Chinese automobile industry. ProQuest. p. 69. ISBN 9780542994333. http://books.google.com/books?id=3PFILijeX_AC&lpg=PP1&dq=Romancing%20the%20big%20dragon&pg=PA69#v=onepage&q&f=false. "Beijing Jeep Market Share and Capacity Utilization Chrysler's overall prices ranged from $10,613 to $55,690. Chrysler's base model of the Cherokee was $10,613. The prices were not as low as those of Shanghai VW for their basic model" 
  22. ^ a b Gao, George (17 May 2010). "Guangzhou-Fiat JV to make Chrysler Jeep in Changsha". Automotive News (gasgoo.com). http://autonews.gasgoo.com/auto-news/1015204/Guangzhou-Fiat-JV-to-make-Chrysler-Jeep-in-Changsha.html. Retrieved 9 March 2011. 
  23. ^ Schmitt, Bertel (17 May 2010). "The Jeep Returns To China". The truth about cars. http://www.thetruthaboutcars.com/the-jeep-returns-to-china/. Retrieved 9 March2011. 
  24. ^ "Beijing Benz-DaimlerChrysler recalls defective sedans". China Daily. Xinhua. 7 June 2007. http://www.chinadaily.com.cn/china/2007-06/07/content_889631.htm. Retrieved 9 March 2011. 
  25. ^ For knock-down assembly of E-Class, see "China's domestically-made Mercedes-Benz E-Class sedans to get off the line in Beijing". China Business News. Shanghai: May 31, 2010.
  26. ^ Mercedes-Benz seeking higher localization rate in China globaltimes.cn, October 27, 2010
  27. ^ a b Shasha, Deng, ed (13 June 2009). "Chinese public revved up over BMW, Benz on gov't car list". xinhuanet.com. http://news.xinhuanet.com/english/2009-06/13/content_11538089.htm. Retrieved 9 March 2011. 
  28. ^ The people's Hummer: China's Brave Warrior, Autoblog
  29. ^ Dunne, Timothy. "Can Chrysler Rebound in China?" Business Week, November 2, 2007. Retrieved on January 22, 2008.
  30. ^ For Beijing Economic & Technological Development Area, see "Daimler Northeast Asia". Mercedes Benz China. http://www.mercedes-benz.com.cn/content/china/mpc/mpc_china_website/enng/home_mpc/passengercars/home/passengercars_world/about_company/daimler.html. Retrieved 9 March 2011. 

External links