Foton Motors and Mercedes-Benz to Establish Joint Venture Company


On July 15, German Chancellor Angela Merkel will begin his trip to China.

It is no secret that Merkel will sign a series of orders for his visit to China, but the order has not been disclosed. According to senior sources close to Foton Motor, “the senior officials headed by Wang Jinyu, the general manager of Foton Motor, are busy preparing for the signing of the contract.” The so-called signing of the contract means that the 16th Fukuda and Daimler will follow the 50:50. Equity is set up in a joint venture agreement with a heavy truck joint venture.

This means that Fukuda and Daimler will end their seven-year long “love” journey and officially embark on the marriage hall.

In 2003, Dai Ke (formerly Daimler's predecessor) who could not reach a consensus with FAW, turned his eyes to a new partner, BAIC, and the two parties signed the Strategic Cooperation Framework Agreement, in addition to the establishment of Beijing Daimler. In addition, the cooperation between Foton Motors and Dai-Ke in the commercial vehicle field is also included. After the completion of the Daimler project in Beijing, Dai-ke hopes to start cooperation with Foton Motor as soon as possible and form a joint venture to produce dual-brand products from Daimler and Foton.

The “Development Policy for the Automotive Industry” promulgated by the Development and Reform Commission in 2004 gave Dai Ke a shot. The "Automotive Industry Development Policy" expressly provides: "The same foreign company can establish two (including two) joint ventures in the country to produce the same vehicle products (passenger cars, commercial vehicles, and motorcycles) in the country."

At that time, Dai Ke has established a joint venture with Fujian Automotive Industry Corporation and Yangzhou Yaxing. In order to achieve the goal of joint venture, Foton Motor attempted to purchase Yaxing-Daimler, because according to the industrial policy, "If joint venture partners with Chinese partners in the merger of Other domestic automobile manufacturing companies can not be restricted by the two." But due to Yangzhou The opposition of the municipal government and Yaxing - Daimler's heavy debt burden, Foton Motor gave up the acquisition plan.

This delay is two years. In 2006, Dai Ke and Futian Motor Co., Ltd. were forced to take another path - avoiding joint ventures and issuing private placements. Futian Automobile, which was listed on the A-share market, announced a private placement plan and announced that it will issue additional shares to the actual controllers Beiqi Holdings and Dai-ke at 2.75 yuan per share. Among them, foreign strategic investor Dai Kechuang accounted for 24% of the new share capital after issuance. , Become the second largest shareholder of Foton Motor. In accordance with the assumption of bilateral additional issuance, if approved, the two sides will still take a dual-brand development strategy and produce Daimler branded engines at the joint venture company.

Although this private placement program intends to avoid the 25% joint venture line (according to regulations, foreign shares reach 25% is a Sino-foreign joint venture), it has still not received the approval of the Securities Regulatory Commission and the National Development and Reform Commission. On the one hand, since 2007, China's stock market has ushered in a super-bull market. The share price of Foton Motor has plunged to more than RMB 16 and it is increasing the number of foreign-invested companies at a price of 2.75 yuan per share. Naturally, it is suspected of “selling”; On the one hand, the NDRC's "whether 25% or 1% are all joint ventures," and the cooperation between Foton Motors and Dai Ke failed to return.

In 2007, Dai Ke withdrew from Yaxing - Daimler, finally released a joint venture quota, also let Dai Ke and Fukuda's cooperation turned a corner. At the end of 2007, Daimler, who had separated from Chrysler, began to return to the negotiation table with Foton Motor. This time, Daimler gave up the idea of ​​a dual-brand strategy. Futian Auman, a native Chinese brand, became the only one that both sides supported in their development.

In August 2008, Foton and Daimler signed a letter of intent to establish a 50:50 joint venture to establish a medium and heavy truck joint venture company. The joint venture will produce Futian Auman brand medium and heavy trucks and Daimler engines. However, this project has not been approved by the relevant national authorities.

The reason for failure to approve is also the cooperation itself. Informed sources disclosed that because the joint venture company used Futian's own brand, and in general, the export of independent brands and overseas factories are not restricted, and before that, Daimler asked Foton Motor to build Daimler's Agreed, and Fukuda hopes that the joint venture company can have greater autonomy, so it has been delayed so far.

"The market has undergone great changes. This is a very important reason for Daimler to make concessions." Informed sources told reporters that "the NDRC's approval has passed, and now only the final review of the Ministry of Commerce."
View related topics: Fukuda and Daimler succeeded in creating commercial vehicle giants


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