Beijing Benz-DaimlerChrysler Automotive Co. Ltd, what a long name! But this name will disappear at the end of this year. Daimler and Chrysler are planning to separate from each other and Chrysler plans to withdraw from Beijing. It seems to be certain that people can not buy any luxury vehicles of Beijing Benz-DaimlerChrysler.

Daimler and Chrysler, the former partner, are now seeking their own beautiful future in China. A three-side combination of China, Germany and America ends with the secession of Chrysler.

On Aug. 18th, news came from the inside of Beijing Benz-DaimlerChrysler Automotive Co. Ltd.(hereafter BBDC), saying that Daimler and Chrysler has reached an agreement on the problem of BBDC. The personnel of Chrysler are withdrawing from Beijing step by step.

Wang Dazong, general manager of Beijing Automotive Industry Holding Co. Ltd.(hereafter BAIC), told the journalist that recently Daimler had made contact with BAIC. “On the one hand it was about the influence on BAIC brought about by the separation of Daimler and Chrysler; on the other hand it was about the exploration of the new business modes.”

The divorce of Daimler and Chrysler in China has entered the substantial stage.

The Coming End of Chrysler 300C

According to the news from BBDC, nowadays, there are only 4 technicians in the BBDC’s plants in Beijing, watching over the production of Chrysler 300C and Chrysler Sebring. Most of the American technicians are evacuated.

“Daimler is reconstructing some production equipment to make them meet the demand of producing Benz’s products,” an insider of BBDC said. “The separation work of Daimler and Chrysler should be finished by the end of this year.”

An insider from the headquarters of Chrysler in Asia said to the journalist: “Chrysler is trying for the common development with the potential partners in China, but now there is no certain information.”

Before this, there were lots of guess on the future of BBDC after the end of relationship of stock ownership of Daimler and Chrysler. For example: someone guessed that both sides might stay in the inside of BBDC as independent shareholders, turning BBDC into a three-side joint venture; someone guessed that Daimler could not agree with the way mentioned above and maybe Chrysler might secede from BBDC.

It can be heard quite often that Chrysler is seeking new partners. Chery Auto, Great Wall Auto and some other China’s domestic brands are ranked within the consideration scope of Chrysler.

With the details of various aspects of the divorce having come out to the public, the final result will go into people’s views step by step.

According to the news, due to the fact that the sale of Chrysler 300C and Chrysler Sebring is not satisfactory, the production of Chrysler 300C nearly stops and the production of Chrysler Sebring is very small.

It is also said that the current stocks of Chrysler 300C can satisfy the need of the sale. Later the production of this model will continue, but the main purpose is to use up the components in stocks. In the second half of this year, the main work of BBDC is to adjust the organization’s structure and personnel.

If Chrysler finally secedes from BBDC, how will these two models be produced? According to the news from the inside of BBDC, whether the production of these two models can continue or not depends on the sale in the market. Due to the fact that the present performance of these two models is not good, the way BBDC will adopt can be to stop the production when the output reaches a certain number. So a majority of the energy can be put into the production of Benz’s products.

Chrysler declared that it would not give up Chrysler 300C and Chrysler Sebring. A person from headquarters Chrysler in Asia said: “The production and sale of Chrysler 300C and Chrysler Sebring are still on. And we are still discussing with BBDC on how to provide better product and service for the consumers. These two models are excellent products of Chrysler and are worldwide praised and appreciated. We will never give up the hope of the successful development of Chrysler 300C and Chrysler Sebring in China.”

New Benz Vehicle in 2010

From another point of view, the fading out of Chrysler accelerates the development of BBDC in the future.

For BAIC, the bilateral cooperation of China and Germany can urge Daimler to pay more attention to this cooperation. This is undoubtedly what BAIC is always expecting.

According to Wang Dazong, BBDC has already set up new directorate. Daimler gave high evaluation of the new team of BBDC. “Every time when I meet Dieter Zetsche, president of Daimler Group, he always tells me that China’s market is very important for Benz and we are their most important partner in China by now,” said Wang.

Now Daimler has the plan to launch new product into BBDC. “In 2010 there will be a new model of Benz vehicle. And we are exploring for the cooperation in other aspects,” Wang said.

According to the insider’s analysis, if Daimler and Chrysler don’t separate completely, the situation of three islands of stability will be formed inside BBDC. “BAIC and the other two independent foreign-funded enterprises simultaneously manage the joint stock operation, which can cause contradiction in both the product introduction and the decision-making. The divorce of Chrysler and Daimler will solve such a problem.”

In the opinion of a top management of BBDC, Daimler’s former idea of small-scale development in China has been obviously changed strategically.

Daimler’s best sold vehicles, Benz C-Class and E-Class have been introduced into China and the Made in China has already been realized. According to BAIC’s enterprise which manufactures relevant components, Daimler is thinking about the cooperation with Chinese enterprises in the field of components and parts after the success of the full car. Now Daimler has the plan to discuss with this enterprise on the cooperation in the field of engine. “Daimler has decided to send relevant personnel to investigate the plants and equipment,” said an insider.

An insider of BBDC told that a saying was spread in the company: Daimler will put in 1 billion USD for the loss of BAIC caused by the divorce of Daimler and Chrysler.

The insider said: “Although the saying has not been proved by now, it is certain that Daimler has changed its attitude toward the market of China. Above all the number of German technicians has increased largely.”

For Daimler, the secession of Chrysler will provide better production environment for the Benz’s products. At present, domestic-made Benz E-Class, C-Class, Chrysler Sebring and Chrysler 300C are simultaneously manufactured in the plants of BBDC. But so far as we know, most of the capacity is used by Chrysler’s products. “Now the plants of punching and coating are shared by Chrysler and Daimler and both sides have their own plants of jointing and assembly,” said an insider of BBDC.

According to the insider, Daimler is reconstructing some production equipment to make them meet the demand of manufacturing Benz’s products. After the reconstruction, those capacity will be used for the production of Benz’s products.

In addition, Wang Dazong said that the problem of low utilization ratio of the capacity had haunted BBDC for a long time. “According to the international experience, only when the utilization ratio reaches 70%-80% can the profit be realized. But BBDC’s utilization ratio is far below this level.”

After the reconstruction of the equipment and production line, Daimler may launch more products to raise the utilization ratio of BBDC.