DaimlerChrysler to boost parts purchases in China
Reuters, Shanghai
DaimlerChrysler AG (DCXGn.DE) plans to boost its purchases of China-made auto parts eightfold by 2008, the carmaker said on Friday, joining the rush for low-cost local content in the fast-growing Chinese market.The company will spend about $840 million buying components in China in 2008, up from the current annual amount of about $100 million, Till Becker, chief executive of DaimlerChrysler's northeast Asia region, said in a statement. China and its major trading partners are locked in a dispute over high import tariffs on auto components. Beijing imposes tariffs of around 28 percent on foreign parts -- about double the normal rate -- if they account for 60 percent or more of a vehicle's value. This is proving expensive for foreign makers of some luxury brands such as DaimlerChrysler's Mercedes-Benz and BMW (BMWG.DE), which rely heavily on imported components. DaimlerChrysler is making Mercedes cars on a small scale in a Beijing plant, and wants to raise annual capacity to 25,000 cars by the end of 2006.
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