Tuesday 14 October 2014

Daimler launches China's GLA SUV in 2015

The Mercedes-Benz GLA-Class compact sports utility vehicle (SUV) will go into production in China next year as the company’s first locally produced compact car model.

The vehicle will be produced at the Beijing Benz Automotive Co., Ltd. – BBAC’s – brand-new compact car site, the cornerstone of which was laid in September 2012.

Last week, Daimler AG and its Chinese partner, BAIC Motor Corporation, signed an agreement for further “localization” of further Mercedes-Benz compact car models beyond the GLA-Class at Beijing Benz Automotive Co., Ltd. (BBAC), the production joint venture of Daimler and BAIC Motor.

The agreement will help Daimler strengthen its local footprint, and demonstrate its strong commitment to China and its strategic partner, BAIC.

Daimler and BAIC Motor will invest a total of approximately €4 billion in their joint venture BBAC by 2015, including the latest pledge of €1 billion for “localization” of additional Mercedes-Benz compact car models.

Existing production capacities at BBAC for the C-Class, the all-new long-wheelbase version of which started rolling off the production lines in July, the long-wheelbase E-Class, and the GLK-Class will be more than doubled to over 200,000 units a year in 2015.

BBAC claims the latest agreement demonstrates the company has reached “new heights” in terms of R&D, manufacturing and management capabilities, and further strengthens Sino-German partnership with BBAC representing “the strong partnership” between China and Germany.

The BAIC Group claims to be China’s fifth-largest automotive group, with more than 2 million vehicles delivered in 2013. The two companies teamed up in 2003 for a long-term strategic partnership involving significant and continuous investments in China’s automotive industry. Daimler further strengthened the partnership just one decade later, holding a 12 per cent stake in BAIC Motor since November 2013.

Among the partnership’s key joint ventures is BBAC, which has produced Mercedes-Benz cars since 2006 and engines since 2013.

The Mercedes-Benz four- and six-cylinder engines produced at BBAC's engine plant are used in both locally produced cars from BBAC and vans built by Daimler’s local joint venture Fujian Benz Automotive Co., Ltd. (FBAC).

The production line was designed with flexibility in mind, with an annual capacity of 250,000 units for the first phase. A new BBAC R&D site became fully operational this July, and as the largest of Daimler’s joint venture R&D centres in the world provides component and vehicle testing while supporting all production tests as well as future localization.

Another strategic component of the partnership between Daimler and BAIC is Beijing Mercedes-Benz Sales Service Co., Ltd. (BMBS). This company became operational in March 2013, unifying and managing all sales and after-sales activities for imported and locally produced Mercedes-Benz cars under one roof. Sales up to September reached 203,485 units, a 30.5% year-on-year increase.

Daimler and BAIC’s partnership extends beyond passenger cars. Jointly manufactured medium- and heavy-duty trucks have been rolling off the production lines of Beijing Foton Daimler Automotive Co. Ltd. (BFDA) since mid-2012. In 2013, the joint venture sold 103,300 Auman branded trucks.

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