Recruiting in China

By JOE McDONALD, AP Business Writer 1 hour, 3 minutes ago

BEIJING - DaimlerChrysler AG on Friday formally opened its first factory to make Mercedes-Benz and Chrysler sedans in China, joining a rush of foreign automakers scrambling for a share of the booming Chinese car market.

The company plans to expand its financing business and is talking to potential Chinese partners about possibly producing a lower-cost model for the U.S. market, said chairman Dieter Zetsche.

Earlier, Zetsche and VIPs, including the Communist Party secretary of Beijing, attended a grand opening ceremony with fireworks and traditional Chinese drummers and dancers.

General Motors Corp., Volkswagen AG, Toyota Motor Corp. and other competitors already make cars in China.

A key challenge for foreign automakers in China is the government‘s insistence that at least 40 percent of their components come from Chinese suppliers, whose quality is still uneven. Zetsche said DaimlerChrysler intends to meet that target, though he acknowledged that it would not be able to do so immediately.

Zetsche declined to comment on U.S. and European complaints that China‘s tariffs on auto parts are too high. The governments are reportedly considering filing a World Trade Organization complaint against Beijing.

Zetsche said the company expected sales to meet those levels but would not say how long it would take. He said the factory is expected to be profitable when sales are well below its full capacity.

"We‘ve had a very slow ramp-up to make sure we get the quality right," Hale said. "As we identify more suppliers that meet our standards, we bring them into the supply chain."

The company has not disclosed prices for the models made in Beijing.

"With one partner, we have very much progressed (in talks), but still haven‘t come to a final decision," he said.

The company‘s new Beijing factory is a joint venture with a Chinese partner, state-owned Beijing Automotive Industries Corp.

Beijing Automotive‘s chairman, An Qingheng, said the venture hopes eventually to produce 300,000 vehicles a year.

The joint venture‘s president, Guenter Butschek, said it plans to launch a new Chrysler advertising campaign in China shortly.

"This brand will for sure be far better known to the Chinese customer in a couple months," he said.

Chrysler Corp. opened a joint-venture Jeep factory in Beijing in 1983, becoming the first Western company to produce vehicles in China since the 1949 communist revolution. Chrysler merged with Stuttgart, Germany-based Daimler Benz AG in 1998 to form DaimlerChrysler.