BEIJING - DaimlerChrysler AG may yet build minivans in China, reviving a project that both Chrysler and Daimler-Benz sought but could not bring to fruition.
If successful, the new venture could complicate the future plans of Shanghai General Motors. GM's joint venture has been quietly preparing to add a minivan at a plant which will begin building Buick sedans in December. It is awaiting approval from the Chinese government.
'We are prepared to do it, but of course under more realistic circumstances' than those originally laid out,' said Eike Lippold, president of Daimler-Benz Northeast Asia.
In 1995, Chrysler Corp. lost out to Daimler in an attempt to receive a Chinese government mandate to build minivans in southern China. At the time, Chrysler Chairman Robert Eaton said Chrysler was unwilling to meet China's demands for technology transfers.
Daimler essentially abandoned the project after it failed to agree to terms with the Chinese government. Those terms included China's requirement that final assembly be split between two rival provinces.
'It looks like our approach was not so clever,' said Lippold, who took his current position six months ago. 'When a country is keen to realize a project, it finds a way. But you need arguments' to support changing the terms of the original plan, he said.
He said his company is currently preparing a market survey to ascertain China's needs for a minivan. To gauge the potential supplier base, Daimler plans to visit 25 factories by December, he added.
Upon the news of the merger between Daimler and Chrysler - the two finalists in the race for the minivan project - Lippold said that 'many Chinese said, 1/8Next year, please restart and reactivate the project.'' Those who approached Daimler included the central government, other government bodies, and non-governmental institutions, he added.
Lippold said he did not know where the revived project would go, or who the Chinese partner would be.
Moving it away from the original two provinces designated by the central government would entail a major revision in the project's terms.
Daimler may benefit from Asia's current economic troubles. Direct foreign investment into China has slowed. That has led China's government to approve several large-scale projects with foreign companies that had previously been bogged down in talks.
Shanghai GM has begun pilot production at its new, $1.6 billion plant, to be dedicated on 17 December. As part of the equipment trials, the plant's body and paint shops have been building minivan side panels, even though the plant is currently only authorized to build sedans.
A GM official said the minivan panels were there to test the machinery's maximum capabilities regarding body panel sizes.