Daimler AG’s primary China-based joint venture intends to increase manufacturing capacity of Mercedes-Benz cars by 45% at its two Beijing plants. Daimler, which is working with BAIC Motor in China, intends to add one shift and two working days at its plants to achieve this goal.
A document on the website of Beijing, Benz Automotive Co., Ltd (BBAC) explained these projected capacity increases. This document also served as a form of gathering public opinion on the increases. Daimler has 49% ownership of BBAC. BBAC is Daimler’s main source of business activities in China.
BAIC Motor owns the remaining 51% of BBAC. This ownership is not BAIC Motor’s only tie to Daimler. BAIC Motor’s parent BAIC Group owns 5% of Daimler.
The document specified that the number of annual working days at both Beijing plants will increase to 312 days per year. Prior to the increase, one of the plants had 290 working days every year. The second of the plants, meanwhile, had 250 such days every year.
According to the document, one of the plants will also add a shift of 7.5 hours every working day. Both plants will produce gasoline-powered as well as electric vehicles.
Neither BBAC nor BAIC Motor made any comments on the projected upgrades. Nevertheless, after initial reports emerged about these plans to upgrade, Hong Kong-listed shares of BAIC Motor increased their values by approximately 5%.
Daimler sells more cars in China than in any other country of the world. In 2020, Daimler sold 611,000 vehicles in China. This figure represented an 8% increase from the 567,000 vehicles sold in 2019. Daimler expects the figure to further rise in 2021 due to a rapid increase in demand for its vehicles. It was for this reason that Daimler chose to increase manufacturing capacity at its plants.
Starting from next year, Daimler plans to begin work with Geely, another China-based automobile manufacturer. Geely currently owns 9.7% of Daimler. Geely and Daimler agreed to do so in 2019; however, the actual work will only begin in 2022. The two companies will collaborate to produce electric smart cars. In addition, Daimler has a truck venture with Beiqi Foton. Like BAIC Motor, Beiqi Foton’s parent company is also BAIC Group.
Policymakers in China expect around 20% of all new vehicle sales in 2025 to be battery electric, plug-in hybrid, or hydrogen fuel-cell vehicles. In 2020, China accounted for 41% of all of the world’s electric vehicles sold.
On this topic, Chris Jones, an automotive analyst at Canalys, said, “Prospects are very good for China’s EV (electric vehicle) market in 2021. There is already an excellent network of standardized public EV chargers in China, good government support, and now a return to strong consumer demand.”
8th June 2021 10:28
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