DaimlerChrysler buys stake in Mitsubishi

FRANKFURT (Germany), MARCH 27. DaimlerChrysler AG, seeking a foothold in Asia, said on Monday it would buy 34 per cent of Japan's Mitsubishi Motors Corp. - an alliance that would create the world's third-largest automaker.

In a statement issued before the stock market opened in Frankfurt, DaimlerChrysler said its chairman, Mr. Juergen Schrempp, and the Mitsubishi president Mr. Katsuhiko Kawasoe had signed a letter of intent in Stuttgart to form an alliance regarding the design, development, production and distribution of passenger cars and light commercial vehicles.

DaimlerChrysler said it would pay $2 billion for the stake through a capital increase, giving the company regular seats on Mitsubishi's board ``to be part of the decision making process at Mitsubishi.'' The final contracts will be signed within the next few months.

The move represents a major commitment by DaimlerChrysler to the Asian market, where Schrempp has said his company wants to earn 25 per cent of its revenue. - New York Times

To examine fall-out in India

NEW DELHI, MARCH 27. Daimlerchrysler is likely to examine the feasibility of introducing Mitsubishi vehicles in India following its decision to purchase a 34 per cent controlling stake in Mitsubishi Motors Corporation (MMC) for $2.1 billion.

''We will have to consider what kind of a tie-up can be had for the global markets including India,'' Mr Jurgen Ziegler, Managing Director and CEO of Daimlerchrysler's Indian subsidiary Mercedes Benz India Ltd. (MBIL) said here.

Daimlerchrysler is currently operating in India through MBIL in which it holds 86 per cent stake and produces the E-class cars here. In addition, the company also has a ten per cent equity holding in Tata Engineering and Locomotive Co., its joint venture partner in MBIL.

Mitsubishi, on the other hand, is operating in India under a marketing arrangement with Hindustan Motors (HM) to produce the Mitsubishi Lancer luxury sedan. Its subsidiary Proton of Malaysia had recently announced a tie-up also with HM for producing the Wira in India.

MMC is also under agreement with Mahindra and Mahindra to produce the Voyager vans in India.

- UNI

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