DaimlerChrysler To Continue Production Of Jeeps In China.

DaimlerChrysler AG, which has been manufacturing Jeeps in China since the mid-1980s, said it has agreed to extend its joint venture with a Beijing automaker to make vehicles there for another 30 years.

The agreement with Beijing Automotive Industry (Group) Co. includes plans to launch

DaimlerChrysler spokesman David Barnas said the first of those models will likely be a compact sport utility vehicle sold under the brand name of its Japanese partner, Mitsubishi Motors Corp. The compact sport utility vehicle will be the first made in China for Mitsubishi, which currently imports SUVs into China.

Newspaper reports indicate that plans call for 20,000 to 30,000 Mitsubishi SUVs to be manufactured annually by 2004. The vehicle is expected to be sold for more than 300,000 yuan ($36,200) in China.

The latest sign of a strengthening of ties between Mitsubishi and its 37 percent owner, DaimlerChrysler, also marks further in-roads by Japanese automakers into the growing Chinese market.

Analysts said that DaimlerChrysler's joint venture, Beijing Jeep Corp., the first between a Chinese company and an outside automaker, has run into trouble in China's crowded SUV sector and was producing far below capacity. Under the new agreement, DaimlerChrysler will continue to hold a 42.4 percent ownership stake in Beijing Jeep Corp., while BAIC will retain the remaining 57.6 percent.