May 3, 2004

Mercedes to build C-Class, E-Class in China

Berlin, Germany - During Chinese Premier Wen Jiabao's visit to Germany yesterday, DaimlerChrysler AG and Beijing Automotive Industry Holding Company Ltd. (BAIC) signed a project proposal to manufacture Mercedes-Benz C-Class and E-Class sedans in China. The vehicles will be produced in a new facility in Beijing with an initial annual production capacity of 25,000 vehicles.

"Establishing a manufacturing presence for Mercedes-Benz passenger cars in China is a key part of our Asia strategy, and further complements our activities in the Chinese market," said Professor Schrempp, who had a personal meeting with the Chinese premier during a visit to Berlin. "Twenty years ago we were the pioneers in China, establishing the first joint venture for automobile production between an international and a Chinese partner at Beijing Jeep. In the future, our intensified involvement in China will help ensure that we take even better advantage of the many business opportunities in the world's fastest-growing automotive market."

Schrempp first met the Chinese premier in Beijing in September 2003 when the Company signed a Euro 1 billion framework agreement with BAIC. The aim of this agreement is to expand the existing Chrysler business activities to include the production of Mercedes-Benz passenger cars, to restructure and relocate Beijing Jeep and to expand production of commercial vehicles.

The framework also includes the cooperation of DaimlerChrysler with Beiqi Foton Motor Corporation Ltd., in which BAIC is the major shareholder, to produce heavy and medium-duty trucks, engines and components at Beiqi Foton's manufacturing facility in Beijing.

Last year, the National Development and Reform Commission had already approved a separate Euro 200 million project proposal to produce Mercedes-Benz Sprinter and Vito/Viano vans in a new facility in Fuzhou City, Fujian Province, which will be jointly operated by DaimlerChrysler, Fujian Motor Industry Group from Fujian, and China Motor Corporation from Taiwan. Beginning in 2006, this plant will have the capacity to produce 40,000 vans a year.

DaimlerChrysler has a long history in China and Mercedes-Benz has been present in the country for more than 60 years. DaimlerChrysler's joint venture with BAIC to create Beijing Jeep Corporation (BJC) in 1983 was the first automotive manufacturing joint venture established in China.

In 2003, DaimlerChrysler sold more than 33,000 automobiles in China and Hong Kong, of which more than 12,000 were Mercedes-Benz passenger cars.

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