Daimler to expand local production in China

February 26, 2018 - Seeing further growth potential in the Chinese automotive market, Daimler and BAIC announced plans to further expand local production for the Mercedes-Benz brand at their joint venture, Beijing Benz Automotive Co. Ltd. (BBAC).

• Local production hub Beijing Benz Automotive Co. Ltd. (BBAC) to operate additional production location

• Investment of over 11.9 billion RMB to prepare BBAC for further growth opportunities in the Chinese automotive market

• 2nd Beijing production location to facilitate complementary capacities for future new Mercedes-Benz models “Made in China, for China”, including battery-electric vehicles

Through an investment totaling over 11.9 billion RMB (about 1.5 billion euros) by Daimler and BAIC, BBAC will prepare to operate another production location for high-quality premium vehicles, in addition to its established local production hub in Beijing’s Yizhuang industrial park. As part of the investment, a BAIC production facility located in the capital city’s Shunyi district will be transferred to BBAC, and modified to facilitate complementary production capacities for Mercedes-Benz cars.

“Local production is a strong pillar of our sustainable development in China"

Together with BAIC, Daimler continues developing BBAC into one of the most pioneering manufacturing hubs in Daimler’s global production network. The expansion of localization announced today will allow Daimler to respond to increasing market demand with local models tailored to Chinese customers’ needs, including electric products from Mercedes-Benz’s EQ brand. Daimler is dedicated to furthering New Energy Vehicle (NEV) development in China, already the largest NEV market globally, as part of the company’s “Made in China, for China” commitment.

“Local production is a strong pillar of our sustainable development in China. By deepening our cooperation with our local partner BAIC, BBAC will continue playing a key role for Mercedes-Benz in China,” said Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China. “This production capacity expansion for BBAC will allow us to meet the expected growing demand for premium passenger cars in China, including for electric vehicles.”

“With over a decade of remarkable achievements, BBAC stands as evidence of the strong collaboration between BAIC and Daimler,” said Xu Heyi, Chairman of the BAIC Group. “As a model of Sino-German cooperation, BBAC has set successive benchmarks in terms of technology and quality standards. Going forward, both partners will continue to support BBAC as it provides additional, attractive products, contributing to the development of the Chinese automotive industry.”

Mercedes-Benz’s unified global standards govern all production

This deepening of the cooperation between Daimler and BAIC further demonstrates the strengths of combining “Industry 4.0” and “Made in China 2025”. By using smart manufacturing and increased digitalization, these efforts will help to further accelerate the manufacturing upgrade in China’s automotive sector. Mercedes-Benz’s unified global standards govern all production from BBAC. Production at the Shunyi facility will also follow the quality standards and processes, extending along the entire supply chain. As a full-fledged production facility, it will include a body shop, paint shop, press shop, as well as assembly lines.

“Globally, our plants run at full capacity, which is why we need further production facilities around the globe,” said Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain. “BBAC is an integral part of our global production network of Mercedes-Benz Cars. With the new production location and our battery production in Beijing, we are progressing well with our electric initiative.”

In 2018 China was once again Mercedes-Benz’s largest single market, with local production of around 480,000. Employing more than 11,500 staff, BBAC’s portfolio includes the C-Class (standard- and long-wheelbase version), E-Class (long-wheelbase version), A-Class (long-wheelbase version), GLA and GLC (standard- and long-wheelbase version) vehicles. In 2017, Daimler and BAIC announced a joint investment of five billion RMB (about 655 million euro) for Battery Electric Vehicles and battery localization at BBAC as part of the electric initiative. The first model from Mercedes-Benz’s EQ brand, the EQC SUV, is scheduled to roll-off production lines by the end of 2019.

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