Commercial vehicle maker Beiqi Foton Motor Co. said Thursday its talks to form a partnership with DaimlerChrysler AG were ongoing.
“We are still negotiating on some details with relevant parties, mainly about the issue of the production base for the passenger vehicles,” Beiqi Foton said in its 2004 financial statement released Thursday.
A rise in costs of raw materials such as steel, and price cuts in some of its auto models contributed to Beiqi Foton recording a fall in net profit on year in 2004, despite an increase in revenue.
The Beijing-based company recorded a 4.5 percent decline in net profit last year to 217.3 million yuan (US$26.25 million) from 227.5 million yuan, even as core revenue rose 29 percent year on year to 17.9 billion yuan, based on its financial results.
The results were consolidated, audited and based on Chinese accounting standards.
Beiqi Foton said the U.S.-German auto group was holding in-depth talks with both the Yangzhou Municipal Government in China’s southeastern province of Jiangsu and relevant departments in Beijing.
“Once a breakthrough (in the deal) is reached, we will disclose it to the public,” the carmaker said.
The two companies are aiming to cooperate in producing heavy and medium-duty trucks, engines and components at Beiqi Foton’s manufacturing facility in Beijing.
The partnership was part of a deal signed in late 2003 between DaimlerChrysler and Beijing Automotive Industry Holding Co., Beiqi Foton’s parent company, to expand on a 20-year alliance.
DaimlerChrysler also was planning to buy non-tradable shares in Beiqi Foton, previously named Beiqi Futian Automobile Co., but so far no details on either the size of the stake purchase or other financial terms have been disclosed.
(Shenzhen Daily January 28, 2005)