In hopes of drawing in consumers who desire the long-wheelbase sedans from German rivals BMW and Audi, Daimler AG has started building a "stretched" Mercedes-Benz E-class sedan dubbed E300L in China.
In Beijing, Daimler's joint venture with Beijing Automotive Industry Holding Co. is producing the C-class sedan and has added a long-wheelbase E class dubbed the E300L, which will start selling in July.
Beijing Benz forecasts heavy sales for both models and so it tripled annual production capacity to 100,000 units.
Currently, over 40% of the components are locally sourced. But by 2013, Daimler plans to raise that percentage significantly when its new engine plant starts production.
The new engine plant will build four-cylinder gasoline engines for the lineup that is produced at two of Daimler's joint ventures in China. E-class customers in China can opt for a 204-hp or a 245-hp gasoline engine.
This facility will be constructed at the Beijing Benz Automotive Co. complex. According to Guenter Butschek, CEO of Beijing Benz DaimlerChrysler Automotive Co., Mercedes Benz will source over 500 parts from China for the locally made E class.
He added that Daimler had picked Chinese suppliers that have the quality and resources to supply Daimler factories around the world.
Daimler assembly plants in Alabama in the U.S. and Germany have already started using exported Chinese-made components such as radios and wire harnesses. Last summer, Mercedes started importing the E300 into China. The imported E-Class sedan is priced from 618,000 ($90,500) to 668,000 yuan ($98,000).