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Beijing Jeep Corporation to Be Restructured

27 September 2000

Beijing Jeep Corporation to Be Restructured

    *  Total investment of US$ 226 million
    *  Management structure to be revised
    *  Two new models will roll off the line within three years

    BEIJING, STUTTGART, Germany, and AUBURN HILLS, Mich., Sept. 27
DaimlerChrysler and Beijing Automotive Industry (Group)
Company announced today that they would invest a total of US$ 226 million to
restructure the joint venture, Beijing Jeep Corporation.
    A Memorandum of Understanding, signed by both parties, includes the
revamping of the joint venture's management structure along with the
introduction of two new models within three years.
    Beijing Jeep Corporation became China's first automotive joint venture
when it was established in May 1983.  Over the past seventeen years, the joint
venture has introduced many advanced technologies and quality standards to
China's automotive industry while introducing Jeep Cherokees and other
products for the local market.  Beijing Jeep products have steadily improved
in quality and reliability over this period.
    The new injection of capital, new management and technology proposed by
the two partners will provide the company with the boost necessary to ensure
its future competitiveness.  As the present joint venture agreement nears the
end of its term, the two partners are completing the agreement for the next
phase of cooperation.
    The agreement calls for eventual localization of Beijing Jeep management.
Modern management training programmes along with a performance evaluation
system for all employees will be put in place to ensure that this goal is
attained.
    Pending timely approval of the MOU, new products including the latest
model Grand Cherokee, and the BJ2 will be introduced by the end of the year
and in 2002 respectively.  The Grand Cherokee will be a genuine Jeep brand
product, while the BJ2 will be locally designed and produced with 100 % local
content. The BJ2 will hold the distinction of being the first fully new
automotive product jointly developed by a joint venture in China specifically
for the Chinese market.  The model also opens up possibilities for export
markets.
    The agreement calls for the programme to be implemented within 2002, with
further plans commencing in 2003 when new product models will be considered
for the Chinese and other markets.
    Renewal of the joint venture signals DaimlerChrysler's long-term
commitment to and further investment in China, and complements the company's
overall Asian Strategy to build up a presence in Asia.