Daimler to build heavy trucks in China
August 28, 2019 Category China News Round-up, Weekly
German auto maker Daimler plans to build Mercedes Benz-branded heavy trucks in China by revamping truck plants owned by its local joint venture. The plan will deepen the alliance between Daimler and its Chinese truck JV partner, Beiqi Foton Co, and comes after the purchase of a 5% stake in Daimler last month by its Mercedes Benz passenger car partner, Beijing Automotive Group Co, Foton’s parent group. “Localization of Mercedes Benz-branded trucks had been planned years before, so it has nothing to do with BAIC Group’s recent stake purchase in Daimler,” one source said.
Under the plan, Beijing Foton Daimler Automotive (BFDA) will add Actros trucks to its production lines, which are mainly used to make Auman trucks, the joint venture’s sole truck brand. The JV plans to revamp its No 3 plant, which will have an annual capacity of 60,000 heavy trucks, and expand capacity at its No 2 plant to 100,000 units from 60,000 now. The value of the investment was not known. All Mercedes Benz trucks currently sold in China are imported and priced significantly higher than domestically made Auman trucks.
Founded in 2012, the truck joint venture sold just over 100,000 units in China last year. Daimler is seeking to further develop its truck business with Foton, but the lack of a solid supply chain in China remains an obstacle, sources said. “One of the biggest challenges is to build up a good local supply chain, as many heavy truck components for Mercedes Benz trucks cannot be locally sourced for now,” a source said.
China’s heavy truck market has fared better than the overall auto market this year, thanks to a growing e-commerce industry and improvements in traffic and logistics infrastructure. About 732,000 heavy trucks were sold in China in the first seven months this year, down 1.4% from the same period a year earlier, while the overall auto market dropped 13.5%. Other major heavy truck makers in China include FAW, Dongfeng and Sinotruk, the Shanghai Daily reports.
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