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BAIC Group and Daimler AG Plan to Invest RMB 11.9 Billion in Building New Energy Luxury Car Production Base(Reprinted from Beijing Automotive News)

Created at:2018-03-01

On February 26th, the BAIC Group and Daimler AG jointly announced that both sides plan to invest more than RMB 11.9 billion in upgrading the factory of BAIC Motor Corporation Limited’s Beijing Branch (hereinafter referred to as the ‘Beijing Branch’) in Shunxi District of Beijing City so as to build the new luxury car production base of Beijing Benz Automotive Co., Ltd. (hereinafter referred to as ‘Beijing Benz’). Such a move is not just an important measure of the BAIC Group for keeping abreast of the new energy vehicle (NEV) industry’s development tendencies and deploying business in the new energy luxury brand market through Beijing Benz, but also an active response to the Beijing Municipal Government’s call for the development of high-end, precise and sophisticated industries. It is also a vital action taken by the BAIC Group for the implementation of its comprehensive new energy strategy. As BAIC Group Party Committee Secretary and Chairman Xu Heyi noted, being located in Beijing, the capital of China, the BAIC Group must pursue development towards high-end, precise and sophisticated industries. It is through Beijing Benz’s capacity upgrading that the BAIC Group realized structural adjustment featuring an emphasis on core competitiveness, thereby laying a firm foundation for the value appreciation of state-owned assets.

In recent years, Daimler AG and the BAIC Group have continued to deepen their strategic cooperation. Beijing Benz, a JV firm of both sides, has witnessed rapid development. By implementing lean production, Beijing Benz strictly observes Daimler AG’s quality management system in the whole process from supply management to production flow, ensuring that its products meet the internationally uniform Mercedes-Benz quality standards, as well as the planned new factory in Shunxi District of Beijing. According to the plans, the new factory will be equipped with complete luxury car manufacturing systems including a welding workshop, painting workshop, pressing workshop and final assembly line. The current plans show that the new factory will localize the production of several Mercedes-Benz product models (including new energy vehicles).

Quotes

 “Localized production is one of the core pillars supporting Daimler AG’s sustainable development in China. By deepening its long-term cooperation with the BAIC Group, Beijing Benz will continue to play a crucial role in boosting the brand development of Mercedes-Benz in China. Beijing Benz’s increase in overall capacity will help us to better meet the demands of the Chinese market for luxury cars (including new energy vehicles) in the future”.

- Tan Shikai, BOD member of Daimler AG in charge of business in the Greater China Region (GCR)

“Over the past 10 or more years, Beijing Benz has witnessed the continuous deepening of the long-term partnership between the BAIC Group and Daimler AG, creating a series of miracles. As a paragon of Sino-German cooperation, Beijing Benz has set new benchmarks in production technology, manufacturing processes, quality standards and so on. In the future, both sides will continue to strongly support the development of Beijing Benz, bring consumers more and better products, and make further contributions to the development of China’s automotive industry.”

- Xu Heyi, BAIC Group Party Committee Secretary and Chairman

 “Thanks the strong performance of the Chinese market, the output of Mercedes-Benz passenger cars in the global market has increased for seven consecutive years, hitting a record high in 2017. We are continuing to expand Benz’s global production network in response to the ever-growing market demand. Beijing Benz is set to build a power cell factory and Shunyi New Factory, showing that we are forging ahead in the field of new energy vehicles.”

- Markus Schafer, BOD member of the Mercedes-Benz Automotive Group in charge of production and supply chain management

 “After undergoing more than 10 years of development, Beijing Benz has developed into a leading Mercedes-Benz passenger car production base. Last year, Beijing Benz became the Benz production base with the highest output in the world. We will take this capacity expansion as a vital opportunity for Beijing Benz’s further development and expedite the localization process so as to provide Chinese customers with excellent products that meet Benz’s internationally uniform quality standards.”

- Fang Mingbo, Beijing Benz President and CEO

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In 2017, China again became the world largest single market for Mercedes-Benz passenger cars, and the proportion of the sales volume of localized car models in the total sales volume exceeded 70%. Meanwhile, Beijing Benz’s output exceeded 430,000 units, making it the Mercedes-Benz passenger car production base with the highest output in the world for the first time. Beijing Benz currently has an employee workforce of more than 11,000 persons, and its products include the Mercedes-Benz Class C, Class E, GLA SUV and GLC SUV. In 2017, to strengthen the strategic cooperation of both sides in the NEV field, Daimler AG and the BAIC Group announced that they will jointly invest RMB 5 billion in the localization of Benz battery electric vehicles (BEV) and the localized R&D and production of power cells. In light of this plan, Beijing Benz’s first Benz EQ BEV model, the EQC SUV, will roll off the production line in 2019.