Mercedes-Benz seeking higher localization rate in China

Shanghai October 26 (Gasgoo.com) Daimler AG Chief Executive Dieter Zetsche announced on October 22 that Beijing Benz Automotive Co will expand its production capacity to 200,000 units, and meanwhile reduce the proportion of imported Mercedes-Benz models in the Chinese market to 30% from the previous 70%, seeking a higher localization rate in China, the National Business Daily reported Tuesday.

The 200,000-unit capacity that Beijing Benz, a joint venture between the Daimler AG and BAIC Group, plans to add is consisting of 100,000 vehicles and 100,000 engines.

In addition, the joint venture has decided to invest 27 billion yuan ($4.05 billion) in four years to increase its capacity, expand dealer network and launch new products, aiming to boost sales to 300,000 units by 2015. Then China will become Mercedes-Benz's biggest market, according to CEO Dieter Zetsche.

The German automaker has also accelerated pace of product location in China, which has proven to be extremely successful so far, attributable to the release of the extended version of Mercedes-Benz E-Class and Audi A6L. Daimler AG will introduce Mercedes Benz A-Class and the extended E-Class as well as more locally produced models to the domestic market to improve sales and may adopt a marketing model similar to Smart sales network to attract more Chinese consumers.

According to Bloomberg, Daimler AG will increase sales by over 10% next year in China. For 2010, Mercedes expects to sell 120,000 vehicles in the country, compared to its previous forecast of 100,000.