All four corporate units of the Daimler-Benz group - Mercedes-Benz, AEG Daimler-Benz Industrie, Daimler-Benz Aerospace (Dasa) and Daimler-Benz InterServices (debis) - are active in China.Mercedes-Benz was assembling trucks in China as long ago as 1936. In 1980, the Stuttgart-based motor manufacturer established an office in Beijing. As economic development proceeded in China, Mercedes-Benz China Ltd. was formed in 1986, in Hong Kong. In 1993, Mercedes-Benz sold 5,000 cars and 1,000 commercial vehicles in China - the S-class in particular made a successful showing. An extensive Mercedes-Benz passenger car sales network is currently being set up in the east, south and north of China. Together with the three partners, "Southern Star Motor Company", "Eastern Star Automobile Ltd." and "Northern Star Automobile Ltd.", a total of over 20 authorised Mercedes-Benz service centres will be established by the end of 1995.
As early as September 1988, Mercedes-Benz and its Chinese partner Norinco signed a licence contract on establishing facilities for the production of trucks in Baotou in the province of Inner Mongolia. Construction of the production facilities has meanwhile been completed and large-scale production has been started. Mercedes-Benz and Norinco are currently negotiating the transfer of these licence production activities to a new joint venture in which Mercedes-Benz would have a capital share.
In September 1994, Mercedes-Benz and Yangzhou Motor Coach Manufacturer (YMC) signed a Letter of Intent concerning a joint venture for the production of buses and coaches. YMC is the largest touring coach producer in China, with an annual production volume of currently 4,300 units. Within the framework of this joint venture, the production of 6,000 touring coaches and inter-city buses as well as 6,000 bus chassis, to be completed by Chinese bodybuilders is planned.
Furthermore, Mercedes-Benz is negotiating possibilities of producing buses and coaches as well as mono-volume vehicles in China with South China Motor Corporation (Nanfang) and investigating additional projects, for instance in the major component sector.
At the "Family Car" exhibition in Beijing in November 1994, Mercedes-Benz presented a sub-compact car study specially developed for the future Chinese market, the "Family Car China" (FCC) from which different versions can be derived. At the same time, Mercedes-Benz submitted to the Chinese government a recommendation encompassing not only the FCC but also a traffic and transport development concept - a holistic strategy for the motorisation of China and the development of the Chinese motor vehicle industry.
AEG Daimler-Benz Industrie, a company with a long-established tradition and international activities, has economic ties with China which date back to the last century. By 1940, AEG had supplied 50 power stations to China, most of which are still in operation today. In 1979, AEG was the first German electrical engineering company to open an office in Beijing. Since then, activities have been intensified through additional offices in Shanghai and Hong Kong. In 1993, sales of AEG Daimler-Benz Industrie in China, at more than DM 140 million, almost tripled compared with 1992.
With AEG's Rail Systems division as chief contractor, the "German Shanghai Metro Group" built 16 metro trains with a total of 96 carriages for the first section of the 174 km long metro system in Shanghai. A joint venture with Chinese partners, in which AEG Daimler-Benz Industrie has a 51% stake, was founded in November 1993 for the production of additional trains. From 1996, AEG's Rail Systems division will supply 120 carriages for the new metro in Guangzhou in the south of China. An order from China representing a turnover of DM 240 million for the Berlin-based Rail Systems division (in future to be known as ABB Daimler-Benz Transportation) is currently being completed.
TEMIC TELEFUNKEN microelectronic GmbH, Heilbronn, an affiliate of AEG Daimler-Benz Industrie, is also active in China. In December 1993, TEMIC's American subsidiary Siliconix founded a joint venture, Shanghai Simconix, with Shanghai SIMTEK Co. Ltd. (each partner holds 50%). In this joint venture Chinese staff are engaged in the final assembly of semiconductor products. Currently, a new joint venture is being set up with partners Shanghai Bell, Science & Technology Commission of Shanghai and Shanghai Industrial Zone New Development Corp. From mid-1995, this new company, TEMIC Microsystems Shanghai, will produce electronic assemblies for the Chinese telecommunications market.
In the field of energy technology, AEG Daimler-Benz Industrie is conducting discussions with Chinese partners on the foundation of joint ventures, for instance for component production. In Shanghai, a joint venture for the production of uninterruptable power supply systems will soon be established.
For AEG's Automation division, the People's Republic of China is a particularly important market with strategic significance. During the last 20 years, the com-pany was substantially involved in modernisation and new construction projects in iron and steel production and processing, in mining, in the concrete and paper industries as well as for crane facilities in Chinese harbours. AEG Daimler-Benz Industrie is also active in the Chinese control systems technology sector and is internationally leading in postal automation. Between 1989 and 1992, the com-pany received orders for mail distribution centres in five large cities (Beijing, Guangzhou, Shanghai, Shijizhunag and Shenyang). In addition, two joint ventures for the construction and maintenance of letter sorting systems were decided upon between AEG Daimler-Benz Industrie, the Chinese Ministry for Post and Telecommunications and Shanghai Telecommunication Equipment Factory (STE). The most recent example of cooperative ventures in China is Beijing AEG Elec-tric Drives Co. Ltd. which started operating in the Chinese capital in October 1993. In this company, in which the Automation Research Institute of the Minis-try of Metallurgical Industry (ARIM) and AEG Daimler-Benz Industrie each have a share of 50%, a staff of 251 develop, produce and market the most advanced digital drive technology systems in China.
At the end of November 1994, Mass Transit Railway Corporation (MTRC) in Hong Kong placed an order for 23 trains with a total of 127 carriages with AEG Daimler-Benz Industrie and the Spanish carriage builders CAF S.A. The main contractor in this project is AEG Schienenfahrzeuge GmbH. From 1997, the new trains will run between the new Chep Lap Kok airport and central Hong Kong as well as Western Kowloon. The total order volume amounts to DM 360 million.
The Diesel Engines division of MTU Friedrichshafen already has two licence production partners in China.
At Daimler-Benz Aerospace (Dasa), economic relations with China are developing apace. Chinese airlines have ordered a total of 49 Airbus models, 29 Airbus units have already been supplied to China. China Eastern Airlines ordered seven Fokker 100 aircraft and plans to take an option on another three. In December 1994, Dasa and Aviation Industries of China agreed to draw up a feasibility study on the development of a new jet aircraft with between 100 and 120 seats. MTU Munich, the company's Propulsion Systems division, concluded service contracts with Shanghai Airlines and China Eastern Airlines.
In July 1994, the Space Systems division and China Aerospace Corporation (CASC, Beijing) founded a joint venture, EurasSpace-Gesellschaft für Raumfahrt-technik mbH, Munich, for the development, production and marketing of tele-communication satellites and ground stations. Further development work on Chinese satellites is already being planned. The foundation of a joint satellite operating company is currently being investigated.
Dasa's office in Beijing is planned to be developed into headquarters from which the cooperative and joint ventures of Dasa will be controlled.
The newest unit in the Daimler-Benz group, Daimler-Benz InterServices (debis), has been active in China ever since the corporate unit was founded. In 1993, debis and the group's Purchasing sector jointly opened an office in Hong Kong and founded Daimler-Benz Purchasing Coordination Hong Kong. This company is responsible for tapping the enormous potential for countertrading and sourcing in China and other Asian countries.
The Daimler-Benz Research division and the Shanghai Institute of Metallurgy (SIM), a department of the Chinese Academy of Science, inaugurated a joint research lab, the "SIM Daimler-Benz LAB", on 14 December 1994. In this, the first research joint venture of Daimler-Benz with a Chinese partner, scientists work on advanced packaging materials and technologies for electronic circuitry and components in the field of high-performance semiconductors. Daimler-Benz makes the necessary technical equipment available and invested more than one million Deutschmarks in the research joint venture. The Chinese scientists will also work in the Daimler-Benz research laboratories in Frankfurt/Main with their German colleagues.
Since September 1994, the Daimler-Benz group has been supporting Beijing Daxue (Beida), one of the best universities in China, by providing financial assistance for the 12 first-term Beida students with the best school-leaving exams. The grants are paid for four years. In order to promote the education of young people from less developed regions of China as well as from low-income families, Daimler-Benz also provides financial support for another 12 students, again for the complete study period of four years. Considering the whole period of studies, a total of 96 students will benefit from the programme per year. In addition, special seminars and trainee sessions are planned for the students receiving grants. And last but not least, Daimler-Benz also supports Beida's library.
In response to the economic development in China, Daimler-Benz decided to open a Daimler-Benz Group Representative Office in Beijing on 1 January 1995. The office is currently being set up; headed by Norbert Graeber, who has been working in China for 14 years, it will coordinate the activities of the Daimler-Benz group in China.
Back to the Newsarchive
© 1995 Daimler-Benz