Seeing further growth potential in China, Daimler and BAIC announced plans to further expand local production of Mercedes-Benz brand vehicles at their joint venture, Beijing Benz Automotive (BBAC).
At a cost of RMB11.9bn RMB (EUR1.5bn), BBAC will operate another factory for high-quality premium vehicles in addition to its established facility in Beijing’s Yizhuang industrial park.
Go deeper with GlobalData
A BAIC factory in the capital city’s Shunyi district will be transferred to BBAC and modified to provide complementary capacity for Mercedes-Benz cars. Both partners will add new products at the second factory.
The expansion 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 said it was 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 Daimler’s China chief Hubertus Troska.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“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.”
Mercedes-Benz’s unified global standards govern all production at BBAC. Production at Shunyi will also follow the quality standards and processes, extending along the entire supply chain. As a full production facility, it will include body, paint and press shops plus assembly lines.
“Globally, our plants run at full capacity which is why we need further production facilities around the globe,” said Mercedes’ production and supply chain head Markus Schafer. “With the new production location and our battery production planned in Beijing, we are progressing well with our electric initiative.”
China last year was again Mercedes-Benz’s largest market with local production of around 430,000 units accounting for over 70% of total local sales.
BBAC was the brand’s largest passenger car production plant worldwide on output in 2017.
With 11,000 workers, BBAC builds the C- and E-Class, GLA and GLC models.
In 2017, Daimler and BAIC announced a joint spend of RMB5bn (EUR655m) for battery electric vehicles and local battery output at BBAC as part of the electric initiative. The first EQ EQC SUV is scheduled to roll off production lines by 2019.
In 2014, a Mercedes R&D centre opened and now employs 850 engineers, designers and other staff.
The centre recently expanded cooperation with Tsinghua University.
Both partners will jointly establish research cooperation for battery safety and fast charging.
