June 24, 2012

Daimler and GAZ start implementation of Mercedes-Benz Vans manufacturing in Russia

Daimler AG and Russian commercial vehicle manufacturer GAZ Group, a part of Russia's biggest business group Basic Element, have started implementation of the project to set up Mercedes-Benz Sprinter production at Gorky Automobile Plant in Nizhny Novgorod, Russia.

The companies are cooperating under the terms of the agreement that came into force in May 2012 after a number of prerequisites agreed upon by the partners had been met. The signing brought the negotiations, which had commenced after a Memorandum of Understanding was signed at the end of 2010, to a successful conclusion.

The parties plan to localise the well-proven Mercedes-Benz Sprinter T1N, as well as the engine and other components. In its partnership with GAZ, Daimler will invest more than €100-million in the product adjustment, production processes and sales network. GAZ Group will invest over €90-million in the project.

In the framework of cooperation both companies are also planning to localise Mercedes-Benz engines at GAZ Group's production site in Yaroslavl. GAZ Group's new plant conforming to the advanced international standards was constructed at the end of 2011 to produce YaMZ-530 Euro-4 engines.

Commenting on the prospects of the joint project to assemble Mercedes-Benz vehicles at GAZ, Volker Mornhinweg, Head of Mercedes-Benz Vans, said at the St. Petersburg International Economic Forum, "The partnership with GAZ will take us a big step forward in the promising Russian van market. For Mercedes-Benz Vans, Russia is an important future market that offers us good growth opportunities. That is why we want to produce our vans for Russia locally and cater to local customer preferences."

According to experts, Russia will become one of the world's largest sales markets in the mid-size and large van segments by 2020 with the annual volume of around 300,000 units. Russia's market volume for this segment today is already about 150,000 units.

"The cooperation with Daimler will enable us to upgrade the manufacturing capacities and processes of Gorky Automobile Plant. And we are already on the way: in May 2012 a contract was signed with Germany-based Eisenmann, the leading international supplier of systems for the automotive industry, to supply a new paintshop for more than €50-million euros. The new technology will ensure full conformance with Daimler standards in the paint process at GAZ, and will also be used for the model range of Gorky Automobile Plant," said Bo Andersson, President and CEO of GAZ Group.

Start of Mercedes-Benz Sprinter production at GAZ in Nizhny Novgorod is scheduled for the first half of 2013. GAZ has started preparation of its production facilities for the joint project. GAZ employees are being trained at Daimler plants in Germany.

Daimler will organise the vehicles sales and service through the existing Mercedes-Benz dealership network, which will grow significantly in the future.


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