Daimler to triple Beijing JV capacity on sales boom

0 CommentsPrint E-mail China Daily, December 15, 2009
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Daimler AG, parent of German luxury car brand Mercedes-Benz, said yesterday it was tripling the production capacity at its Beijing joint venture, amid skyrocketing local demand.

The capacity of Beijing Benz-DaimlerChrysler Automotive Co Ltd (BBDC), a joint venture between Beijing Automotive Industry Holding Co Ltd, Daimler AG and Daimler North East Asia Ltd, would be raised to 75,000 to 100,000 units per year, depending on shift patterns. As part of this the company would convert the former Chrysler hall into Mercedes spaces for C- and E-Class expansion, said Ulrich Walker, chairman and CEO of Daimler Northeast Asia.

"BBDC is performing exceptionally well and will hike production of C-Class and the locally produced long-wheel base E-Class vehicles. Looking forward, in the mid-term, Daimler and its partners would produce as many vehicles as we import," said Walker.

Sales of the locally produced C-Class have exceeded expectations, and clocked a year-on-year growth of 189 percent during the first 11 months. The company has delivered nearly 14,500 units of these vehicles to Chinese customers.

According to Walker, BBDC has increased the localization rate of Mercedes cars to 45 to 50 percent and identified 85 new China-based suppliers and worked with them to support the local production.

Walker estimated that Daimler will sell more than 70,000 cars, vans and trucks in China this year, more than a 50 percent increase over last year, strongly boosted by the record sales of Mercedes cars. He expects Mercedes sales to surpass 65,000 units for the whole year, representing a 65 percent growth rate.

For the coming year, "as we introduce more vehicles and especially as we have more local production, we expect our sales to increase at a faster rate than the 15 to 20 percent of China's automobile market", said Walker.

He said the company would introduce four or five new Mercedes models next year and expand the dealerships from the current 141 to 180.

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