Daimler targets Asia through Nissan talks
09:46 a.m. May 11, 1998 Eastern
By Scott Miller
FRANKFURT, May 11 (Reuters) - Daimler-Benz AG on Monday took fresh
steps toward meeting its lofty sales goals in Asia, confirming it was in talks with
Japan's Nissan Motor Co to cooperate in commercial vehicles.
Some analysts worried that the struggling Japanese company could present
problems for Daimler, already planning to merge with the U.S. Chrysler Corp
and and widely believed to be mulling a strategic link-up with another Japanese
carmaker -- Mitsubishi Motors Corp.
But others said Daimler, maker of Mercedes-Benz cars and trucks, could give
itself a leg-up in the Asian truck market by striking a deal with Nissan.
''This is very positive for Daimler,'' said Rolla Kautz, analyst at BHF Bank.
''Daimler is weak in Asia, especially in trucks. It would take a long time for
Daimler to build up in the growing Asian market by themselves.''
Daimler and Nissan confirmed on Monday they were in talks about forging a
cooperation agreement on commercial vehicles, including a possible sale of
shares in truck maker Nissan Diesel Motor Co Ltd.
The pair said there was no timeframe for an agreement which could take the form
of anything from an outright share purchase to joint product development to a
Nissan agreement to buy Daimler axles and drive trains.
Daimler, Germany's largest industrial company, has set itself ambitious sales goals
in Asia, saying that within 10 years it hopes 20 to 25 percent of group revenue
will come from the region, compared with about 10 percent now.
Although Daimler's car and aerospace units would provide the biggest push, the
company's commercial vehicle division, the world's largest, is being counted on to
help boost sales.
Nissan's range of products makes it an attractive fit for Daimler which wants to
increase sales in Asia's fast-growing market for light trucks.
Daimler is already well established in heavy trucks through its Actros line in
Europe and Freightliner range in the U.S., and could benefit from Nissan's
background in smaller commercial vehicles in Asia.
''Nissan Diesel would fit very well with Daimler,'' said Commerzbank auto
analyst Andrew Blair-Smith. ''Daimler has a good position in Europe and the
U.S., but is weak in Asia.''
Slumping stock markets in Asia, meanwhile, mean the price for a stake in Nissan
Diesel would be attractive and might force the Japanese company's management
to agree to terms favourable to Daimler.
''If one wants to expand in Asia, now is a good time,'' said Lothar Lubinetski,
analyst at Enskilda Corporate in London.
But he and others worried that a link-up with Nissan could present problems.
Nissan Motor and Nissan Diesel are both struggling with shrinking sales and a
deteriorating balance sheets.
''It seems that Nissan is in a lot of trouble. So that means another restructuring
job for Daimler if they decide to buy,'' Lubinetski said. ''Its always a question of
buying a company that is doing well, or buying one doing badly and restructuring
it.''
Most analysts agreed that although Daimler has just announced a mega-merger
with Chrysler Corp , it would still have plenty of resources to overhaul Nissan
Diesel if it did plan to take a stake in the company.
A Daimler spokesman said there was no connection between the Chrysler
merger and the Nissan talks, noting that the two companies produced very
different ranges of trucks.
As part of its Asia push, Daimler started a 50-50 joint venture with China's
Yangzhou Motor Coach Manufacturer General (YMCG) in 1997 to produce
and sell buses and chassis for Yaxing and Mercedes-Benz makes.
The group has also been producing its MB 800 vehicle in Indonesia since 1997.
A Daimler spokesman said the company would continue to look for Asian
partners for its commercial vehicle business, and industry analysts think this could
include a link-up with Japan's Mitsubishi Motors Corp.
At a news conference announcing the merger of Daimler and Chrysler last week,
Chrysler Chairman Robert Eaton made clear that Asia was high on the new firm's
agenda, saying it would seek to ''become a major force in Asia.'' |
