DaimlerChrysler's China unit is undergoing a turnaround from lackluster sales a couple of years ago.

Yahoo! Singapore Finance is reporting that DaimlerChrysler's joint venture in China is expecting a huge sales increase during 2003. Here's a snippet from the article:

In a market that has relied on cheaper sedan models for its startling growth in the past year, Beijing Jeep Corp. President Paul Alcala still forecasts room on the road for locally built sports utility vehicles.

Alcala expects revenue from the company's Jeep and sport utility vehicle lines to double to more than 3 billion yuan ($1=CNY8.28) in 2003.

He also expects unit sales to increase by more than 50% on year in 2003 as the same factors that drove sedan sales spill over to the SUV market.

That's a remarkable turnaround for China's oldest automotive joint venture which only two years ago appeared to lose its edge despite its early entry into the market.

Sales by the joint venture owned by DaimlerChrysler AG (DCX) and China's state-run Beijing Automotive Holding Co. fell to 10,000 vehicles in 2001 from 80,000 in 1996.

That steep decline - and resulting losses - led to a rethink of the company's China strategy.

Alcala blamed the decline on the company's failure to update its products, leaving dealerships struggling to sell decade-old models to a new generation of more sophisticated consumers.

"For a period of time, we did lose focus on product development (and) that was our main (problem), but now that issue has been resolved," Alcala told Dow Jones Newswires.

Now the company has a plan to boost sales by regularly updating models.

"One of the main factors that stimulated the growth in passenger cars sales has been the entry of the latest technology, well-price positioned and fashionable vehicles," he said. "With Beijing Jeep taking the lead we fully expect that same situation to occur in the SUV segment."

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