BAIC launching aircraft business as China expected to open airspace-report

BEIJING, March 11 Mon Mar 11, 2013 4:37am EDT

BEIJING, March 11 (Reuters) - BAIC Group, Daimler AG's China partner, will expand into small aircraft manufacturing, a business that is expected to generate 10 billion yuan ($1.61 billion) in revenue for the company next year, a media report said on Monday.

BAIC, which signed an initial joint venture deal with Beijing University of Aeronautics and Astronautics in late 2011, is making the move as the Chinese government is expected in May to open low altitude airspace, BAIC's chairman, Xu Heyi, was quoted as saying in the Securities Daily.

BAIC officials could not be reached for comment by Reuters.

BAIC currently makes trucks and Mercedes-Benz cars in partnership with Daimler. It also builds its own-branded vans and passenger cars, including some environmentally-friendly vehicles.

($1 = 6.2147 Chinese yuan)

(Reporting by Fang Yan in BEIJING and Kazunori Takada in SHANGHAI; Editing by Matt Driskill)