DaimlerChrysler AG announced Friday it would pay $1.14 billion in cash for interest in the truck units of Mitsubishi Motors Corp. and Hyundai Motor Co.,
in a move intended to strengthen the German-American automaker's position on the growing Asian market.
DaimlerChrysler will buy a 43% stake of the Mitsubishi unit -- to be called Mitsubishi Fuso Truck and Bus Corp. -- for about $750 million. The company also will exercise an option to purchase a 50% share in the joint venture with Hyundai, a deal valued at around $395 million.
DaimlerChrysler already owns 37.3% of Mitsubishi Motors and 10% of Hyundai Motor. The Stuttgart, Germany-based truck builder said both Asian truck manufacturers will become separate companies with German managers.
DaimlerChrysler, which manufactures Freightliner and Mercedes-Benz trucks, expects worldwide demand to fall this year and be little changed next year. It aims to save money by sharing parts and truck bodies with the Asian companies as it seeks to expand in a market it hopes will account for 50% of all sales during the next decade, up from 43% now.
The German company has cut 2,700 jobs and closed three factories to bring its Freightliner unit back to profit. Freightliner's reorganization has saved the company $500 million and is ahead of schedule, according to Eckhard Cordes, head of DaimlerChrysler's truck business.
The Asian investment decision comes after weeks of speculation that the German truckmaker would step in to help Fuso, which has been struggling with slumping demand in Japan. DaimlerChrysler had 20% of the world market last year, manufacturing 493,000 vehicles.