September 27, 2012

Cornerstone laid for production of Mercedes-Benz Compact Cars in China

Beijing Benz Automotive Co., Ltd. (BBAC), the Chinese passenger cars joint-venture of Daimler AG and its Chinese partner Beijing Automotive Group (BAIC), celebrated an important milestone. Representatives from both partners and numerous guests from politics
and authorities attended the ceremony during which the cornerstone for a new section of BBAC's Beijing plant was laid. Vehicles of Mercedes-Benz' new generation of compact cars are slated to roll off the production line as of 2014.

"Together with our joint venture partner BAIC, we are forging ahead with our future-oriented projects in China. We expect local production of our new generation of compact cars to provide additional momentum to our development in this booming segment of the Chinese market," said Ulrich Walker, Chairman and CEO Daimler Northeast Asia.

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

In June 2011, Daimler and BAIC had 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 far 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 euros and is part of the overall investment program, according to which Daimler and its partners are investing a total of about 3-billion euros in China.


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