Beijing Benz lays cornerstone for plant for Mercedes-Benz compact cars in China

26 September 2012

Beijing Benz Automotive Co., Ltd. (BBAC), the Chinese passenger cars joint venture of Daimler AG and its Chinese partner Beijing Automotive Group (BAIC) laid the cornerstone for a new section of BBAC’s Beijing plant. Vehicles of Mercedes-Benz’ new generation of compact cars are slated to roll off the production line as of 2014.

Our new compacts are so popular with customers that we will add BBAC as the third pillar of our compact car production network besides the Rastatt and Kecskemét plants in the context of our Mercedes-Benz 2020 growth strategy. With the localization of our new generation of compact cars, we will even further serve demand in China close to the market and to our customers. This strengthens our competitive position.

—Dr. Wolfgang Bernhard, Daimler AG board member responsible for Manufacturing and Procurement Mercedes-Benz Cars & Mercedes-Benz Vans

In June 2011, Daimler and BAIC signed a strategic framework agreement which included, besides an expansion of production capacities at BBAC, future local production of vehicles of the new generation of Mercedes-Benz compact cars for the Chinese market.

Construction of a new engine plant for production of 4-cylinder gasoline engines, which was also part of the agreement, has progressed, with production slated to start next year. Also well on track are activities to establish a new R&D center, which will mainly focus on vehicle testing and adaptation as well as R&D activities with suppliers. Investment for these projects amounts to about €2 billion (US$2.6 billion) and is part of the overall investment program, according to which Daimler and its partners are investing a total of about €3 billion (US$3.9 billion) in China.

Local production of Mercedes-Benz passenger cars began in 2006 at the 50/50 joint venture BBAC with the predecessor of the current E-Class. In spring 2008, the C-Class joined local production as the second model. Since May 2010, BBAC has been producing the current E-Class as a long-wheelbase version especially customized to meet the requirements of the Chinese market. Production of the GLK began in December 2011 as the third model line in BBAC’s Beijing plant.