German automotive giant Daimler and Chinese automaker Beijing Automotive Industry Corp (BAIC) announced on Monday plans to further expand local production for the Mercedes-Benz brand with their joint venture, Beijing Benz Automotive Co (BBAC), and with an investment of nearly 12 billion yuan (.9 billion).
The news came on the heels of an announcement detailing the recent acquiring of a 9.69 percent stake in Daimler by Li Shufu, chairman of domestic carmaker Zhejiang Geely Holding Group, on Saturday, indicating Daimler's confidence in the growth potential of the Chinese automotive market, the world's largest.
Through an investment totaling over 11.9 billion yuan by Daimler and BAIC, BBAC will prepare to operate another production location for high-quality premium vehicles in addition to its already-established local production hub in Beijing's Yizhuang industrial park, according to an email statement Daimler sent to the Global Times on Monday.
As part of the investment, a BAIC production facility located in Beijing's Shunyi district will be transferred to BBAC, and modified to facilitate complementary production capacities for Mercedes-Benz cars.
The second Beijing-based Mercedes-Benz production facility will produce new car models "Made in China, for China", including battery-electric vehicles.
The expansion of localization announced Monday will allow Daimler to respond to increasing market demand with local models being tailored to Chinese customers' needs, including electric products from Mercedes-Benz's EQ range, the statement said, noting that the company is dedicated to furthering the development of new-energy vehicles (NEVs) in China, already the largest NEV market globally.
The deal came as more Chinese and overseas carmakers are expanding cooperation through methods like mergers and acquisitions, in an effort to cope with a fast-changing global industry.
Great Wall Motor, based in North China's Hebei Province, reached an agreement with German automobile company BMW to cooperate through joint ventures, according to a statement Great Wall sent to the Global Times on Saturday.