DaimlerChrysler eyes Asian sales

Company continues talks with Nissan on chance of alliance or asset sale

Automotive industry

January 23, 1999|By KNIGHT RIDDER NEWS SERVICE

TOKYO -- The co-chairman of DaimlerChrysler signaled yesterday that his company intends to aggressively boost its sales revenue in Asia, and would prefer to acquire factories in Japan instead of building them.

Those broad hints aside, Juergen E. Schrempp would confirm only that talks continue between his company and beleaguered Nissan Motor Co., Japan's second-largest automaker, over the terms of a possible alliance or asset sale.

"Within 10 years, our goal is that 20 to 25 percent of total revenues will come from Asia," Schrempp told reporters here. "This is a great challenge. But I think we need great challenges."

Schrempp said DaimlerChrysler could use a number of strategies to reach its goal, including building new factories or acquiring an equity partner. "I guess the difference [between these approaches] is time," he said. "Our only problem is, we are very impatient."

Amid reports that DaimlerChrysler and Nissan were close to a deal involving Nissan's ailing truck business, Schrempp would say only, "We will continue the conversations [with Nissan] in the very near future."

In an interview yesterday, Nissan President Yoshikazu Hanawa said he is interested in a deal with DaimlerChrysler. "It's an excellent company," he said. "Of course, I'm interested." Asked to describe the conversation with Schrempp, Hanawa said, "Constructive."

In recent weeks, Hanawa made it plain that he is willing to sell a piece of his company to the highest bidder, though auto analysts question whether he's willing to let go. DaimlerChrysler and France's Renault SA have been the only automakers to admit interest.

For nearly a year, officials from Stuttgart, Germany, have been pursuing Nissan Diesel, the debt-laden commercial vehicle manufacturer, which Nissan owns about 40 percent of. Owning a piece of Nissan Diesel would give DaimlerChrysler a crucial platform in a part of the world that is expected to exceed Europe or North America in its demand for heavy trucks and buses in the next century.

A sale also would benefit Nissan, the world's sixth-largest automaker, which is struggling under the weight of about $37 billion in debt and a fleet of passenger cars that is losing popularity among Japanese consumers. In addition, car sales have been shrinking in Japan because of the nation's long recession.

Pub Date: 1/23/99

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