Earlier today we’ve told you that Daimler and Beijing Automotive Group are investing EUR1 billion in order to more than double Mercedes-Benz production in China. Still, it seems that this isn’t enough for Daimler to overtake its German rivals such as BMW and Audi, in order to become the world’s top-selling luxury automaker.
Apparently, the German company is now considering to expand its global production in Russia. "We have been looking at the basic parameters and potential of local production of passenger cars in Russia and have held various discussions," Daimler said today in a statement. The bad news is that Daimler didn’t offer too many details or disclose which companies it is talking to.
Daimler has very ambitious plans and wants to expand production to meet 2020 growth targets and build more vehicles near the markets they are sold. CEO Dieter Zetsche disclosed the fact that he wants to regain the top spot in global luxury sales. For those who don’t know, Mercedes-Benz lost this position back in 2005, when BMW became the king, while in 2011 also lost the second place to Audi.
Despite a slowdown, Russia remains an attractive market for Mercedes-Benz as 2.78 million cars were sold last year. In 2013, Mercedes-Benz sold 44,376 cars in Russia, while BMW managed to sell 42,071. Audi sold only 36,150 vehicles in 2013. Still, Daimler’s expansions plans come when the United States and European Union imposed sanctions on Russian individuals over the country’s annexation of Crimea.
Last week we announced you Russia’s decision to stop buying imported vehicles. Currently, Daimler has a heavy trucks joint venture in Russia with OAO KamAZ, which uses Mercedes-Benz cabs, while engines and axles are supplied to KamAZ. Daimler holds a 15 percent stake in KamAZ. Moreover, an older version of the Sprinter van is built in Russia.
Daimler and Beijing Automotive Group’s recently announced EUR1 billion ($1.37 billion) investment will be implemented at their joint venture site, which builds the Mercedes C-class, E-class sedans, GLK SUV and will add output of the GLA compact SUV next year. The expansion will allow the Beijing site to build more than 200,000 vehicles in 2015.
The Beijing site could be further expanded once demand surge further. Daimler CEO Dieter Zetsche said in a statement that the auto market in China continues to have great potential. China is crucial to Zetsche's target of making Mercedes the best-selling luxury car brand in the world by 2020, besting fellow German premium carmakers BMW and Audi.