Daimler and BAIC Extend Cooperation in China

Daimler and BAIC
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Daimler and BAIC will invest around 4 billion euros in their joint venture BBAC by 2015 to enlarge number of models and production capacity in China.

Daimler and BAIC, China’s fifth largest automotive group with 2 million vehicles delivered in 2013, signed on October 10 an agreement to enlarge number of models and production capacity in China.

The agreement was signed in Berlin by Germany’s Chancellor Dr. Angela Merkel and Chinese Premier Li Keqiang in the presence of Hubertus Troska, Member of the Board of Management of Daimler AG responsible for China, and Xu Heyi, Chairman of the BAIC Group and its car division BAIC Motor.

Daimler and BAIC established, in 2003, a long-term partnership and ten years later, in November 2013, Daimler further strengthened the partnership holding a 12% stake in BAIC Motor.

Both companies will invest around 4 billion euro in their joint venture BBAC by 2015, including 1 billion euro for the localization of other Mercedes-Benz compact car models.

For the moment, BBAC manufacture the long wheelbase E-Class, the GLK and from July this year long wheelbase C-Class. The existing production capacities will be more than doubled to over 200,000 units per year in 2015.

The new GLA will go into production at the beginning of the next year in a completely new production facility, whose cornerstone was laid in September 2012.

Daimler and BAIC works together in other two strategic partnerships.

The Mercedes-Benz 4 and 6- cylinder engines produced at BBAC’s engine plant are used in both locally produced cars from BBAC and vans built by Daimler local joint venture Fukian Benz Automotive Co. LTD (FBAC) which has an annual capacity of 250,000 units in the first phase. The second strategic partnership between Daimler and BAIC is Beijing Mercedes-Benz Sales Service Co. Ltd (BMBS) which became operational in March 2013 and manage all sales and after sales activities for imported and locally produced Mercedes-Benz cars.

Mercedes-Benz has a strong presence on chinese market with 218,045 cars delivered in 2013, an increase of  11%  over the previous year.