According to Walker, Daimler has continued to invest heavily in China, as demonstrated by its local joint ventures and partnerships, including Beijing Benz Automotive Co Ltd in manufacturing passenger cars, with Fujian Daimler Automotive Ltd to produce vans, with Foton-Daimler for trucks, and BYD-Daimler on R&D for new-energy vehicles.

"With such extensive investments, Daimler has now expanded to all segments of the automotive industry in China. Looking forward, we are dedicated to further strengthening these investments in order to reinforce our competitive edge in this market, and again we feel proud to be able to sustainably develop together with a market that is as rich, dynamic, and rapidly growing as China," said Walker.

He also told China Daily that the German automaker and its partners have decided to invest 3 billion euros in China in the next years."

"There is no doubt that all of the automakers will continue to invest," said Thomas Schiller, managing director of consulting firm Arthur D. Little in China.

"The country is for many OEMs (original equipment manufacturers) already the most promising or most important market. And even the competition is fierce, the size and growth of the market requires investments to gain more competitiveness and not only to increase production."

Last year, the Chinese government made extensive efforts to encourage mergers and acquisitions in the domestic automobile industry, in a bid to integrate the industry and improve local automakers' competitiveness.

"We are very impressed to see a growing number of local companies becoming more globalized and much more competitive. And together with them, Daimler is extremely pleased to also take an active part in the fast development of the Chinese automotive industry," said Walker.

However, to maintain their leading position ahead of domestic rivals, Schiller suggested foreign OEMs invest in product development to enrich their portfolio, create lower-priced cars and compete directly with Chinese OEMs.

He also advised foreign automakers to move more of their investments to less-developed parts of the country.

"Many OEMs are only strong in one area, for example dominant production and location in the south, but weak in the north," said Schiller.

"All multinational and domestic players should allocate plants to underdeveloped regional markets," he added.

Global automakers are also facing challenges to keep investment balanced with market conditions and development, according to Schiller.

"There will be a consolidation phase sooner and nobody knows when and how much the next boom will start. All OEMs should to be prepared and invest heavily, but cannot allow low utilization of their capacity," said Schiller.

(Xinhua News Agency Aug 18, 2010)