Beijing Jeep, the first joint venture vehicle company in China, is running heavy losses and could go bankrupt, China Economic News said. The joint venture was set up in 1984 between firms under the Beijing municipal government and American Motors, later acquired by Chrysler, which has since merged with Daimler-Benz. DaimlerChrysler holds 42 per cent of the venture, while state-owned Beijing Auto Industry owns the remainder.
Last year the joint venture planned to sell 12,000 vehicles, 20 per cent more than in 2000. However in the first eight months of 2001, sales were 25 per cent down year-onyear. A special directors’ meeting decided to inject US$226m into the firm to import new machinery and develop new models. However, the plan has not been put into practice because the Chinese side cannot raise the money, despite promises of support from the mayor of Beijing and other senior officials.