Daimler has anounced a EUR1bn doubling of car and engine capacity and the addition of GLA production at its Chinese joint venture Beijing Benz (BBAC).
Of the EUR4bn currently being invested in BBAC, the EUR1bn specified in the agreement signed recently is to be used solely for the expansion of local car and engine production capacity until 2015.
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Daimler chief Dieter Zetsche saod: “We are deeply rooted in China. The agreement we have signed shows once again that we are making steady progress in China together with our longstanding partner BAIC. The Chinese automobile market continues to have great potential. We want to participate in this growth, also by expanding our local production.”
Daimler’s board level China chief Hubertus Troska added: “The steady expansion of local production and the continuous deepening of the cooperation with our Chinese partners are key elements of our China strategy. “The rapid development at BBAC, which we are pushing forward systematically together with BAIC, is an excellent example of a successful Sino-German industry partnership. With the agreement we have signed today, we are laying the groundwork for ongoing sustainable profitable growth in China.”
Existing production capacities at BBAC for the C-Class, E-Class and GLK will be more than doubled to over 200,000 a year in 2015 – then including the compact GLA, which will go into production at BBAC next year – and will be further increased after that in line with market demand.
In 2013, BBAC was first to build Mercedes-Benz car engines outside Germany. The four- and six-cylinder engines are used in the locally produced cars and vans built by the joint venture Fujian Benz Automotive (FBAC). The production line was designed flexibly and an annual capacity of 250,000 units per annum is planned for the first phase. Higher numbers will be planned in line with the ongoing growth in unit sales.
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By GlobalDataThe agreement is a further step in the successful collaboration between the two partners and is based on a strategic framework agreement that was concluded in mid-2011.
With more than 2m vehicles delivered in 2013, the BAIC Group is China’s fifth-largest automotive group. The two companies have been linked since 2003 in a long-term strategic partnership, involving substantial and continuous investments. Since November 2013, Daimler has held a 12% stake in BAIC Motor, the car division of the BAIC Group.
BBAC has been producing Mercedes-Benz cars since 2006 and engines since 2013.
A new research and development centre will go into operation at BBAC this year.
