Mercedes-Benz parent Daimler and China’s Beijing Automotive Industry Corp. have announced a new joint initiative that will see four new models produced in China. The deal also includes the expansion of a Chinese engine plant and the construction of a new r&d center.
China remains one of Daimler’s fastest-growing markets, with the latest investment set to capitalize on that growth. All told, both sides will spend $2.87 billion on the project.
“As early as 2020, at least one in five premium compact cars is expected to be sold in China,” Daimler CEO Dieter Zetsche said. “In light of this enormous growth potential, we are resolutely switching to attack mode with the local production of our new compacts.”
Daimler will begin Chinese production of the GLK SUV this year, followed by three compact models by 2013. However, Daimler failed to identify those compact models.
The deal also includes a new engine plant. Set to produce gasoline-powered four-cylinder engines, the plant is expected to be completed in 2013. The plant will initially produce about 100,000 units per year, but that figure will eventually be increased to 250,000.
A new technical center is also part of the plan, which will be responsible for vehicle testing and r&d efforts with suppliers.
Daimler’s Mercedes-Benz brand trails luxury rivals Audi and BMW in China, but sales so far this year have increased 62 percent to 75,896 units.
References
1.’Daimler, BAIC invest…’ view
