Hangzhou - Daimler AG is showing its ambitions in China's high-end multipurpose vehicle (MVP) market as it rolls out two luxury models, the Viano and Vito.

The vehicles are produced by Fujian Daimler Automotive Co Ltd, a three-way venture between Daimler AG, Fujian Motors Group (FJMG) and China Motors Corp from Taiwan.

Target buyers of the luxury MPVs are "a little bit different" in China than in Europe and the US, said Volker Mornhinweg, executive vice-president of Daimler AG, at a test drive in early June.

Rather than individuals, China's luxury MPV buyers are often big State-owned enterprises, banks and hotels.

But how big the market will be unclear, as Rene Reif, president and CEO of Fujian Daimler Automotive Corp, declined to reveal sales targets, either for the long or medium term.

"We don't want to announce and then fail to fulfill goals and then explain that to people," said Reif. "We can only say that we have very ambitious plans and we will let people know when the right time comes."

The designed yearly production at Fujian Daimler is 40,000 units, but its facility has yet to run at full capacity.

Now with 23 dealerships across China, the company plans to have 42 outlets by the end of the year.

Its plans call for 54 dealerships in 2011 and 77 by the end of 2014.

Daimler's two joint ventures in China - Fujian Daimler and Beijing Benz Automotive Co Ltd - currently have 40 percent of their components produced locally, Mornhinweg said. The ratio is expected to increase in the next few years.

"We will promote the cooperation between the two joint ventures in localization," said Mornhinweg, leading reporters to wonder if Beijing Automobile Industry Corp (BAIC) might still have plans to purchase Fujian Daimler.

Reported stake sale

It was reported that FJGM signed an agreement with BAIC last July to sell 40 percent of Fujian Daimler to BAIC.

News reports late last month said discussions between the two companies were suspended due to a disagreement over price.

Lian Xiaoqiang, chairman of FJMG, said only a letter of intent, not an agreement, was signed last year. Sources at BAIC said negotiations with FJMG are still underway.

Daimler's two high-end MPVs are both equipped with a 2.5-liter, six-cylinder petrol engine that produces 140 kW in power and 220 Nm of torque paired with a five-speed automatic transmission.

The Viano model is 1,875mm high and 1,901mm wide with a wheelbase of 3,200mm. The Vito offers buyers both eight-seat or nine-seat configurations.

Prices for the two vehicles range from 316,000 yuan to 438,000 yuan.

China Daily

(China Daily 06/21/2010 page18)