Daimler Chrysler Motor Corporation will become a major shareholder in the Beijing-based Beiqi Foton Motor Company through a share-purchase contract worth USD 105 million, the Chinese company said in Beijing on Tuesday.
Under the contract, Daimler Chrysler will buy 297 million shares in Foton, a 24 per cent holding, at 2.75 yuan per share, said a statement from Foton, a leading Chinese minivan manufacturer, said.
The two sides also signed an alliance agreement to cooperate in heavy-duty truck manufacturing, Xinhua news agency reported.
Daimler Chrysler is speeding up its expansion in China, now the world's second largest market for new vehicles.
The company has just joined Taiwan China Motor corporation and Fujian Motor Group in setting up a joint venture in southeast China's Fujian Province.
The new company, Daimler Chrysler Light-Duty Motor Company, involves a total investment of 200 million euros with Fujian Motor Corporation holding 50 per cent of the shares, Daimler Chrysler Motor AG 33.78 per cent and Taiwan China Motor Corporation 16.22 per cent.
It will have an annual production capacity of 40,000 medium-sized and light-duty vehicles.
Daimler Chrysler also reached an agreement in principle with Chery, a carmaker based in the eastern Anhui Province, allowing Chery to produce vehicles under Chrysler Group brands, the report said.
China overtook Japan to become the world's second largest market for new vehicles in 2006 next only to the United States.