Foton inks Joint Venture agreement with Daimler commercial vehicles

• Beijing Foton Daimler will sell medium and heavy duty trucks in China
• China accounts for 40% worldwide medium and heavy truck sale
• Daimler will set up the production facility for the OM 457 engine (Euro IV)
• First truck roll out Q3 2012
• Last year Beijing Foton sold over 100,000 medium- and heavy-duty trucks
• Foton trucks are distributed by the Tan Chong group in Malaysia

The joint venture Beijing Foton Daimler Automotive Co., Ltd. (BFDA) will enable Daimler’s commercial vehicle division to participate extensively in the Chinese market for medium- and heavy-duty trucks
In its first full meeting, the Board of Directors (BOD) appoints the Board of Management and sets the course for future development
Joint venture is an integral part of Daimler Trucks’ growth strategy: Daimler holds 50 percent stake in the medium- and heavy-duty truck business of Auman brand
On February 18, Daimler and its Chinese partner Beiqi Foton Motor Co., Ltd. held a festive ceremony to celebrate the reception of the business license for the joint venture Beijing Foton Daimler Automotive Co., Ltd. To commemorate this event, the partners unveiled a plaque in Beijing bearing the official name of the joint venture, which will operate from the Foton Auman facility in Beijing’s Huairou district.
BFDA will enable Daimler’s commercial vehicle division to participate extensively in the Chinese market for medium- and heavy-duty trucks. The market’s volume has doubled over the last five years, and more than one million trucks are now being sold in this segment in China. Last year, China accounted for around 40 percent of total sales of medium- and heavy-duty trucks worldwide.
“By founding BFDA, we have taken another step forward in the global growth strategy of Daimler Trucks, as well as the local expansion of our product portfolio in China: Our 50 percent stake in Beijing Foton Daimler Automotive will enable us to play a major role in the Chinese truck market and give us access to the attractive volume segment,” stated Andreas Renschler, Member of the Board of Management of Daimler AG and Head of Daimler Trucks and Daimler Buses. “With this joint venture now fully operational, we’re sending out a clear signal that we deliver on what we promise in developing Daimler Trucks’ worldwide strategy.”

“The establishment of the joint venture between Daimler Trucks and Beiqi Foton lifts the longstanding association between Daimler and BAIC here in China to a new level, and will greatly strengthen our strategic and operational cooperation,” said Xu Heyi, Chairman of Beijing Automotive Group Co., Ltd. (BAIC), Foton’s biggest shareholder.
The ceremony was followed by the constituent meeting of BFDA’s Board of Directors, chaired by Andreas Renschler and Wang Jinyu, President of Beiqi Foton. The BOD appointed BFDA’s Board of Management, with Wu Yuejun from Foton as President and Stefan Albrecht from Daimler as Executive Vice President.
During the first BOD meeting, the two sides finalized the agreed-upon contracts with BFDA and established the organizational structure of the joint venture, the company guidelines, and the next steps for future development. It is the clear aim of both partners to make use of the “best of both worlds.” Besides making a financial investment, Daimler will share responsibility for the joint venture’s Finance, IT, Quality Management, and Development departments. In addition, Daimler will set up the production facility for the OM 457 engine at BFDA’s headquarters. The OM 457 engine, which is being successfully used in Mercedes-Benz commercial vehicles in Europe and Latin America, will meet the future China IV emissions standard (corresponds to Euro IV).
Foton contributes its existing Auman medium- and heavy-duty truck business, including the production sites and the sales and service network. The joint venture will also be able to draw on Foton’s market know-how in China and the rest of Asia to facilitate faster business development across the entire region.
BFDA’s first jointly developed truck is scheduled to roll off the production line in the third quarter of this year.
“The great progress made during the past few months has now cleared the way for both partners to jointly start the day-to-day work and forge ahead with this exciting endeavor,” said Ulrich Walker, Chairman and CEO of Daimler Northeast Asia. “With its 50 percent stake in the joint venture, Daimler has increased its commitment to the Chinese market and strengthened our position to succeed in all segments of the market in China: passenger cars, trucks, vans, and financial services.”
Foton has experienced rapid growth since entering the truck business in 1998. Last year it sold over 100,000 medium- and heavy-duty trucks, making it a key player in China’s truck market. A second truck plant is currently being ramped up in Beijing’s Huairou district to give the BFDA joint venture a total production capacity of 160,000 trucks.