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Christine Chan

MERCEDES-BENZ has appointed its second distributor to cash in on China's booming car market.

  Lei Shing Hong of Hongkong will join Jardine International Motors Holdings selling Mercedes cars on the mainland.

      Lei Shing Hong and Mercedes will jointly form Mercedes-Benz East China (Hongkong).

  The Jardine International Motors Holdings joint venture will look after the south, while the latest venture will set up distributors and workshops in the east.

  The provinces to be covered are Shanghai, Jiangsu, Zhejiang, Jiangxi, Fujian and Anhui.

  The new venture will be owned 51 per cent by Mercedes and 49 per cent by Lei Shing Hong.

  Dr Heinz Herbert Bausch, Mercedes director for car sales and marketing for Eastern Europe and overseas, said: ''The new partnership between Mercedes-Benz and Lei Shing Hong signals our desire to intensify our involvement in China.

  ''The joint venture will fill the gap in our organisation that currently exists in Eastern China.''     Lei Shing Hong said: ''The potential of the motor-vehicle market in China is linked to the increase in purchasing power of citizens.''     The company describes itself as a Hongkong firm with diversified interests in China.

   It said that its wholly owned subsidiary, Lei Shing Hong Automobile, had obtained a dealership licence in Shanghai, and would set up sales, workshop and spare parts facilities there within three months.

    With the agreement sealed, Mercedes would now pursue the necessary approvals to establish warehousing, pre-delivery inspection and depot facilities for spare parts in Shanghai, it said.

   Mercedes-Benz China, a subsidiary of Mercedes-Benz, set up Southern Star Motor Co with Jardine International Motor Holdings in 1986 as its sales arm for the southern provinces.

   Last year, China's car output increased by 47 per cent, while the number of cars on the roads topped one million, according to Lei Shing Hong.

  At least 200,000 old cars would have to be replaced, and it had been predicted that car retail sales this year would increase by 15 per cent from the 1992 figure, it said.



HK firm sets up venture to sell Mercedes in east