Daimler sets another milestone for its localization in China

Daimler Truck AG and Beiqi Foton Motor Company plan to produce and distribute Mercedes-Benz-branded trucks in China, marking another important example of the German carmaker strengthening its local footprint in the world's largest auto and truck market.

The companies' joint venture, Beijing Foton Daimler Automotive, has invested more than 3.8 billion yuan ($581.75 million) in the acquisition of a new plant and the set-up of new infrastructure and production lines. The fully-fledged local production is planned to start in two years, supported by a local supplier base, which will be further strengthened over the coming years.

Hubertus Troska, member of the Board of Management of Daimler AG, responsible for China, said: "We aim to grow in China, and with China. That applies to our passenger cars as well as our commercial vehicle business. The Chinese truck market is undergoing a transformation, especially in the long-haul transportation market. The growing e-commerce and logistics industries offer great opportunities."

According to the companies, the new heavy-duty Mercedes-Benz trucks for China will capitalize on Daimler Truck's platform strategy and will be powered by a state-of-the-art engine from Daimler Truck's global powertrain unit.

Daimler Truck will also continue to import and sell other models in its Mercedes-Benz portfolio through the existing dealer network and direct wholesale to meet the requirements of its customers in China, especially for top-of-the-line trucks for special applications.

Leverage market potential

China, the world's largest truck market, is of utmost importance to Daimler Truck and has become one of its important markets for future growth, the company said earlier this month.

In order to make full use of this potential, Daimler made the decision to locally produce Mercedes-Benz heavy-duty tractors in China, for China. The company is convinced that the move is the right strategy for the right market at exactly the right point in time.

Statistics from Daimler show that 1.1 million heavy-duty trucks were sold in China last year. The company estimates that half of the global heavy-duty truck sales this year will be in the country.

Daimler Truck has been pursuing a two-fold strategy in the Chinese market. On one hand, Mercedes-Benz trucks are exported to China where Daimler Truck is a market leader in the heavy-duty segment among the international truck manufacturers.

On the other hand, BFDA addresses the local market for value and price-driven trucks by producing trucks in China under the Auman brand.

Dedicated localization

Troska said: "Producing Mercedes-Benz trucks in China is not only an excellent example of Sino-German cooperation, it also marks a big milestone in Daimler's localization strategy in China."

Daimler's localization efforts in China began on the passenger car side in 2005 when the first Mercedes-Benz E-Class sedan rolled off the assembly line of its joint venture Beijing Benz Automotive Company.

The locally produced Mercedes-Benz passenger car portfolio includes a range of eight different models, including four long-wheelbase models exclusively developed for customers in China and one electric vehicle.

In September 2020, the three millionth Mercedes-Benz passenger car from BBAC, also an E-Class, rolled off the assembly line, a fitting tribute to the 15th anniversary of Daimler's local production activities in China.

This year also marks the 15th anniversary of Daimler's local research and development activities in China.

Starting with its first localized Mercedes-Benz passenger car in 2005, Daimler has continuously strengthened its local R&D footprint.

The company was the first German premium car manufacturer to open an advanced design studio in China. It established a dedicated R&D Center, the Mercedes-Benz Research and Development Center, in Beijing in 2014.

The Mercedes-Benz Research and Development Center in Beijing has become the Daimler's most comprehensive outside of Germany.

With the theme of "inspired by China, innovating in China", local professionals cover advanced design, localization, whole vehicle testing, intelligent connectivity, automated driving and electric mobility.

Setting the course for a successful future in China, a new R&D facility in Beijing, the Tech Center China, is scheduled to open next year.

The Tech Center China will further accelerate the localization of Mercedes-Benz products and technologies, outlining that the future development focus of the company in China will focus on electrification and digitalization.

This also applies on a global basis. Daimler recently announced it will accelerate its transformation toward electrification and digitalization with an investment of more than 70 billion euros ($84.9 billion) in R&D and in property, plants and equipment over the next five years.

Enhanced partnerships

As China plays a leading role in future mobility, Daimler has teamed up with local industry leaders, tech players, and startups, as well as universities. The company is poised to embrace its customers in China by delivering excellent services and delight them with desirable products and fascinating technologies.

By increasing its local footprint and sharing future business opportunities with long-term and new partners, the company aims to create mutual benefits to help support the development of the Chinese automobile industry.