Fukuda Daimler's peer-to-peer joint venture
The five-year joint venture between Fukuda and Daimler finally came to fruition. On August 7, Foton Motor and Daimler signed a letter of intent for cooperation in Beijing. The two sides will establish a joint venture company in China with a 50:50 peer-to-peer investment. Mercedes-Benz will introduce medium- and heavy-duty truck technology and heavy-duty engines. In the future, the new joint venture company will produce Foton Auman brand heavy trucks and incorporate it into the Mercedes-Benz global commercial vehicle brand system, borrowing Mercedes-Benz global network to open up overseas markets.
Daimler Cash Contribution
At present, the intention of cooperation between the two parties has been reported to the relevant state departments, pending approval, and it is expected that the formal joint venture agreement will be signed in the next one to two months. It is reported that this time, Foton will invest in all the assets of the Auman Heavy Trucks, including plant and equipment, while Daimler will use cash as input, and the total investment amount will not be disclosed. However, Futian-related sources stated that only Futian's contribution amount was reported. At least 2 billion yuan or more. At the same time, in order to further strengthen the strategic cooperation between the two sides, Daimler is also allowed to make strategic investment in Futian in the future.
Ulrich Walker, chairman and chief executive officer of Daimler Northeast Asia, stated: “Daimler's technology, scale and leading position in the high-end truck market, with Futian's extensive distribution network in China and economical loading The leading position of the car market will form an effective complement. The new joint venture company is in an advantageous position in terms of growth, profitability and scale, both in the domestic and international markets."
Upgrading Auman brand with Mercedes-Benz technology
According to the cooperation intention, in the future, the joint venture's medium and heavy truck products will be distributed only with the Futian Auman brand, and will be equipped with Daimler's MB OM457 engine, and the product will be marked with “Mercedes-Benz powerâ€.
Although this Mercedes-Benz brand heavy truck was not imported into the joint venture as originally planned, the dual-brand strategy has been reflected in the global market. Foton Motor related persons said that in the future, Auman will be a sub-brand of Daimler commercial vehicles. In the global market, Daimler will focus on the mid-to-high end heavy truck market. Auman will be positioned as a low-end heavy truck product in the secondary mass market. And a niche market, so as to increase the competitiveness of both sides in the global medium and low-end heavy truck market.
In the future, the joint venture company will begin production of a 12-liter MB OM457 heavy-duty truck in Daimler. The emission standards will meet Euro V requirements and the initial plan is to sell 45,000 units a year. At present, the Auman plant has an annual production capacity of 100,000 vehicles. After the joint venture is established, the capacity will be further expanded. In terms of products, Futian's Auman Heavy Trucks are currently second- and third-generation heavy trucks, but the fourth-generation heavy trucks are already under development and will soon be put into production at the new company.
The joint venture company will establish an independent research and development center for medium and heavy trucks for China and other markets. Daimler will provide technical and expert support, implement a new quality system, improve the reliability and safety of Auman heavy trucks, and Müller parts adaptability improvements.
Both parties will jointly set up factories in overseas
The joint venture with Daimler will enable Foton to rapidly increase its market share in the medium-to-heavy-card segment based on maintaining its domestic leading position in the light truck industry, and will also accelerate the entry of the Auman brand into the global market.
In fact, the major domestic heavy-duty truck manufacturers currently cooperate with foreign commercial vehicle giants. The competition is becoming increasingly fierce. For example, Shaanxi Auto has the help of German Auman, Hongyan has Iveco to rely on, Sinotruk has Volvo cooperation, and Dongfeng cooperates with Volvo. The negotiations also achieved phased results. The cooperation between Futian and Daimler will break the practice of domestic automobile joint ventures. In the future, the joint venture company will become the operation center for global cooperation between the two parties, not just the production plant, and will have many functions such as management decision, R&D, production, supply chain management, and marketing management.
Futian related sources said that in overseas markets, Foton and Daimler will jointly set up factories overseas to produce Auman heavy trucks and sell them through Mercedes-Benz's global commercial vehicle network. According to the plan, the two parties will establish a joint venture company in Russia when the Chinese joint venture company is established for two years or so, and set up joint venture companies in South Asia and Central and South America three years later and five years later.
In China, Foton will upgrade the existing Auman heavy truck sales to improve its ability to sell and maintain Auman heavy trucks equipped with Mercedes-Benz engines.
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