Daimler is widening its partnership in China with BAIC Motor by signing an agreement to expand the number of vehicles it makes at Beijing Benz Automotive to include the GLA-Class.
The agreement will help Daimler strengthen its local footprint with a EUR4bn spend on the joint venture by 2015. BBAC already produces the C-Class, the redesigned long-wheelbase version of which started rolling off the lines in July, the long-wheelbase E-Class, and the GLK-Class. Capacity will be more than doubled to over 200,000 units in 2015 with the introduction of the GLA-Class from early next year. It will be produced at BBAC’s new compact car site which has been under construction since September 2012.
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The joint venture with BAIC dates back to 2003 and Daimler strengthened the partnership a decade later, taking a 12% stake in BAIC Motor from November 2013. BBAC has produced Mercedes-Benz cars since 2006 and engines since 2013. The four- and six-cylinder engines produced at BBAC’s engine plant are used both in locally produced cars by BBAC and vans built by Daimler’s local joint venture Fujian Benz Automotive.
The production line was designed for flexibility with an annual capacity of 250,000 units for the first phase. A new BBAC R&D site became fully operational this July.
Sales of Mercedes models in China this year reached 203,485 units up to September, a 30.5% year on year increase.
Daimler and BAIC also jointly manufacture medium- and heavy-duty trucks at Beijing Foton Daimler Automotive.
Daimler chairman Dieter Zetsche said: “This shows again that we are both committed to our long-term partnership with BAIC and confident in our future in the key market of China. This strategic investment in the localisation of compact cars will give us better access to the huge growth potential that this segment offers in the mid-term, and so pave the way for Mercedes-Benz’s sustainable growth.”
