We take a more involved look at this later this week in CM, but, for the meantime, what is DaimlerChrysler up to in China? It’s just agreed to buy – subject to regulatory approval – 24 per cent of Beiqi Foton.
Have they been on the herb in Stuttgart? This deal makes no sense. DC wants to produce MB trucks in China for China. And 24 per cent of BQ isn’t going to let them do that. Own-brand needs a licence, licences are part of JV’s, and, whilst 24 per cent of anything in the rest of the world is a strategic stake, in China it’s meaningless.
The US economy is going to the dogs. You couldn’t get a Rizla between the North American and Chinese economies today; not just joined at the hip, but just about everywhere else too. As such, when the US goes down, so too will China – the former imports 22 per cent of all the latter’s exports.
This deal is not about strategy, or market development, or business growth. It is about vanity. How high will DC’s leg get lifted? Pretty vertical is our guess.