Mercedes, BAIC to double China capacity as sales soar
Daimler AG and joint-venture partner Beijing Automotive Industry Holding Corp. will spend 1 billion euros (8.58 billion yuan) to double production capacity at their Beijing plant to keep pace with rising demand.
The factory, which builds C-class sedans, E-class sedans and GLK SUVs, will be able to produce more than 200,000 autos in 2015, the Stuttgart automaker said in a statement Friday. The plant will add assembly of the GLA compact crossover next year.
Mercedes deliveries in China surged 57 percent in the first two months of 2014. The investment outlined on Friday is part of a 4 billion euro Chinese spending project that will include expanding the model lineup.
Key to global growth
Daimler and BAIC will also increase engine production at their Beijing plant from the initial annual capacity of 250,000 as auto sales rise.
"We are deeply rooted in China," Daimler CEO Dieter Zetsche said. "The Chinese automobile market continues to have great potential. We want to participate in this growth."
China is crucial to Zetsche's target for Mercedes to surpass BMW AG and Audi AG in global deliveries by the end of the decade. Success in the country was hampered in the past by separate sales organizations for imported and locally produced cars, which led to price cuts as the two competed with one another.
China reorganization
In 2012, Daimler reorganized its China operations, placed Hubertus Troska in charge of China operations, added dozens of dealerships, opened the company's first engine factory in China and merged its Chinese sales organizations.
In November, Daimler also purchased a 12 percent stake in Beijing Automotive for 625 million euros.
Mercedes has plans to sell 300,000 cars in China in 2015, including imports. The E class built in Beijing is a stretched version of the upmarket car sold elsewhere, targeting wealthy Chinese buyers who favor chauffeur-driven vehicles.
Daimler opened 75 dealerships in China last year and plans to add another 50 annually this year and next.
Mercedes deliveries in China surged 57 percent in the first two months of 2014. The investment outlined on Friday is part of a 4 billion euro Chinese spending project that will include expanding the model lineup.
Key to global growth
Daimler and BAIC will also increase engine production at their Beijing plant from the initial annual capacity of 250,000 as auto sales rise.
"We are deeply rooted in China," Daimler CEO Dieter Zetsche said. "The Chinese automobile market continues to have great potential. We want to participate in this growth."
China is crucial to Zetsche's target for Mercedes to surpass BMW AG and Audi AG in global deliveries by the end of the decade. Success in the country was hampered in the past by separate sales organizations for imported and locally produced cars, which led to price cuts as the two competed with one another.
China reorganization
In 2012, Daimler reorganized its China operations, placed Hubertus Troska in charge of China operations, added dozens of dealerships, opened the company's first engine factory in China and merged its Chinese sales organizations.
In November, Daimler also purchased a 12 percent stake in Beijing Automotive for 625 million euros.
Mercedes has plans to sell 300,000 cars in China in 2015, including imports. The E class built in Beijing is a stretched version of the upmarket car sold elsewhere, targeting wealthy Chinese buyers who favor chauffeur-driven vehicles.
Daimler opened 75 dealerships in China last year and plans to add another 50 annually this year and next.
