BAIC and Daimler to invest €1.5 billion in China
Daimler and BAIC want to invest 11.9 billion yuan, or 1.5 billion euros, in China through their joint venture Beijing Benz Automotive to build a new local production facility. They will produce new energy vehicles among other models.
Beijing Benz Automotive (BBAC) is Daimler’s way into China through BAIC. Together the companies announced their plan to invest into the world’s largest car market heavily. 11.9 billion yuan (1.5bn euros) have been earmarked for the construction of a new production facility.
The new factory will produce new energy vehicles. Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China said that the “production capacity expansion for BBAC will allow us to meet the expected growing demand for premium passenger cars in China, including for electric vehicles.”
As part of the investment, a BAIC production facility located in Beijing will be transferred to BBAC, and modified to facilitate complementary production capacities for Mercedes-Benz cars. Furthermore, both partners will invest into new product localisation at the future second Mercedes-Benz production facility that will also be based in China’s capital.
Daimler and BAIC have a longstanding partnership. News of the investment however, come shortly after Geely has become Daimler’s largest shareholder. The Chinese corporation had acquired public shares after the Germans had turned down offers of a closer cooperation repeatedly. Geely founder Li Shufu said in a statement he was “particularly pleased to accompany Daimler on its way to becoming the world’s leading electro-mobility provider.” He now holds 9.7 percent of Daimler.
The German carmaker has its own plans though it appears and is increasing its electric mobility competence at home and around the world. Untertürkheim is to become the latest site of battery development in Germany. In China, Daimler has also been hedging plans to set up battery manufacturing together with BAIC since last year (we reported).
Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain said “BBAC is an integral part of our global production network of Mercedes-Benz Cars. With the new production location and our battery production planned in Beijing, we are progressing well with our electric initiative.”
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