China’s Chery to Build Small Cars
For Chrysler to Sell World-Wide
DETROIT -- DaimlerChrysler AG's Chrysler Group said Friday it has signed a letter of intent with China's Chery Automobile Co. that will allow the auto maker to build small cars in China that will be sold throughout the world, including the U.S.
Chrysler spokesman Jason Vines said the deal, which has been in the works over the course of the past year, is subject to approval by DaimlerChrysler's supervisory board. If approved, Chery will begin producing small cars for Chrysler "soon," Mr. Vines said. He said Chrysler plans to sell the vehicles in the U.S., Europe, China, Canada and Mexico.
Earlier this year, Chrysler signaled its intent to find a partner capable of helping the auto maker build small cars at a lower cost. Chrysler Chief Executive Tom LaSorda recently confirmed Chery was a potential partner.
Mr. Vines said Mr. LaSorda personally negotiated the pact with Chery. The executive had set a deadline on getting the deal done by the end of 2006.
Chrysler's agreement with Chery is unique among Detroit's Big Three as it is intended to allow a U.S. auto maker to build cars in China and sell them in the U.S. Chrysler, like General Motors Corp. and Ford Motor Co., is working with the United Auto Workers to lower labor costs, including health-care costs. By building small cars in China, Chrysler hopes to be profitable in a small-car segment that often returns meager or no profit margins.
Title: Beijing Remains Unclear On Timing of 3G Licenses
From: Wall Street Journal, By TERENCE POON and VICTORIA RUAN
Date: December 29, 2006
BEIJING -- China's telecommunications regulator hinted for a second time that long-awaited licenses for advanced mobile-phone services may arrive soon, but analysts cautioned against raising hopes for such licenses too high and too quickly.
China's official Xinhua news agency Thursday cited Wang Xudong, who heads the Ministry of Information Industry, as saying the country will "steadily start" third-generation, or 3G, mobile services in 2007 as the conditions for launching the services are "basically ripe."
He added that China should improve competition in the telecommunications market by allowing fixed-line operators, which face rising competition from mobile carriers, to offer mobile-phone services when introducing 3G. Allowing fixed-line carriers to offer mobile-phone services "appears to be very urgent," Mr. Wang said.
His latest remarks, coming weeks after he was quoted by the China Daily as saying 3G licensing will happen "very soon," appear to signal the ministry's sense of urgency on the matter and could buttress market expectations that China will issue 3G licenses as early as February.
But Mr. Wang hasn't given a time frame, and his comments that the conditions exist in China for the development of 3G services merely repeat what some Ministry of Information Industry officials have said.
Analysts said Mr. Wang's remarks needn't imply Beijing will soon issue 3G licenses because various issues, including industry restructuring and the maturation of a locally developed 3G technology, called Time Division Synchronous Code Division Multiple Access, still take time to be settled.
"There must be restructuring before 3G licensing," said Eagle Zhang, vice president of Beijing-based telecommunications and technology research firm Analysys International.
China has two mobile operators, China Mobile Ltd. and China Unicom Ltd., and two key fixed-line carriers, China Telecom Corp. and China Netcom Group Corp. Some analysts say China Unicom, which now operates both CDMA and Global System for Mobile Communications networks, could be split and merged. That would allow an existing fixed-line operator to run one of China Unicom's networks, while China Unicom would be able to run its remaining network after merging with the other fixed-line operator.
Restructuring along such lines, if it comes before 3G licenses, would let the fixed-line operators gain experience operating mobile networks while giving them access to the mobile business, where user growth has exceeded that in the fixed-line sector, said Fang Meiqin, an analyst at Beijing-based telecom consulting firm BDA China Ltd.
China Telecom and China Netcom said in December that they expected 3G licensing to happen soon, with China Netcom Chief Executive Zuo Xunsheng saying: "I think it is going to happen by the end of this year or in the first quarter next year."
Mr. Wang also said the trials on TD-SCDMA are proceeding smoothly and pave the way for large-scale commercial use of TD-SCDMA, adding China should continue the trials in 2007 to ensure a steady start of 3G services.
Analysts say China has delayed issuing 3G licenses in order to give TD-SCDMA time to develop. China has been testing the locally developed technology in five major cities: Beijing, the financial hub of Shanghai, the eastern coastal city of Qingdao, the northern city of Baoding and the southern city of Xiamen, and widened the trials to include more end users in early November.
Beijing hasn't said when the TD-SCDMA trials will end, though analysts say they are running longer than expected.
Mr. Wang said the advent of 3G will lead to an investment surge and offer growth opportunities in the telecom-equipment sector, according to the Xinhua report. China is the world's largest mobile-phone market by users.
From: Wall Street Journal, By JOHN D. STOLL
Date: December 29, 2006 Back