Seeing further growth potential in the Chinese automotive market, Daimler and BAIC today announced plans to further expand local production for the Mercedes-Benz brand at their joint venture, Beijing Benz Automotive Co. (BBAC).
Through an investment topping CAN$2.3 billion, BBAC will prepare to operate another production location 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. Furthermore, both partners will invest into new product localization at the future second Beijing-based Mercedes-Benz production facility.
Together with BAIC, Daimler continues developing BBAC into one of the most pioneering manufacturing hubs in Daimler’s global production network. The company said this expansion of localization 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.”
Mercedes-Benz Cars set its seventh production record in a row last year thanks to its strong growth in China.
“Globally, our plants run at full capacity, which is why we need further production facilities around the globe,” said Markus Schäfer of Mercedes-Benz.
“BBAC is an integral part of our global production network of Mercedes-Benz Cars. With the new production location and our battery production planned in Beijing, we are progressing well with our electric initiative.”
China last year was once again Mercedes-Benz’s largest single market, with local production of around 430,000 units accounting for over 70 per cent of total local sales.
This demand allowed BBAC to become the largest Mercedes-Benz passenger car production plant worldwide in terms of output in 2017.