Bmw and Mercedes-Benz sign deal to cooperate on U.S. vehicle preparation

Article by Christian Andrei, on August 26, 2010

Under a five-year deal signed recently, Mercedes-Benz USA will be preparing the vehicles of BMW and Mini that come in for delivery through the port of Baltimore. The Mercedes-Benz vehicle preparation center will begin to inspect, process and repair all pre-delivered vehicles of these two brands on March 1.

The reason for this of course is to save time and money. BMW and Mini say that the deal makes economic sense.

In an interview with Automotive News, Jim O'Donnell, president of BMW of North America said that he estimates that 50,000 cars that are intended for the central region, including Chicago, will be prepared by Mercedes-Benz. However, details about the agreement remain under wraps.

Presently, BMW vehicles come in through Charleston and are shipped to BMW's factory in South Carolina for pre-delivery work.

O'Donnell said that due to the expansion of BMW's factory in Spartanburg, S.C., "the plant is no longer appropriate once the new X3 (crossover) starts to be built" next year. Since the shipping distance is shorter from Baltimore, O'Donnell says that this will save "reasonable amount of money."

While searching for an outside contractor, BMW's purchasing department proposed the deal. If this set-up works, he said that it's possible the two brands would have a similar arrangement at other vehicle processing centers. In an interview last week, Ernst Lieb, CEO of Mercedes-Benz USA, called the deal "a win-win-situation."

Lieb cited Mercedes-Benz's manpower and space to service these vehicles and said further that "there are other opportunities" for cooperation between the two German competitors. For now, Lieb said that BMW and Mini are assessing whether to use a joint shipping company to handle their brands once the cars are processed in Baltimore.

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