Mercedes-Benz Group unveiled plans on September 4th to invest more than 14 billion yuan (approximately 2 billion USD) alongside local partners, aimed at enhancing its product offerings in the Chinese market. Starting in 2025, Mercedes-Benz will begin producing a trio of China-only electric vehicles: an all-new long-wheelbase variant of the popular CLA, a long-wheelbase iteration of the GLE SUV, and a luxurious electric multi-purpose vehicle (MPV) built on the VAN.EA platform.
With a backdrop of potential Volkswagen plant closures in Germany and ongoing EU tariffs on Chinese electric vehicles? Following a slew of significant investments from its German counterparts – Volkswagen Group and BMW AG – announced in April, this development is particularly noteworthy.
Extra on Mercedes’ funding
According to reports, a significant allocation of over 10 billion yuan (approximately 1.4 billion USD) is expected for passenger car operations, with an additional investment of more than 4 billion yuan (around 550 million USD) earmarked for light commercial vehicles. Domestically produced fashion innovations are expected to be manufactured through collaborations between Mercedes-Benz and its existing Chinese joint venture partners, Beijing Benz, a tripartite alliance with BAIC, and Fujian Benz.
Beijing Benz, a joint venture between Daimler AG and BYD Company Ltd., is set to begin manufacturing its next-generation models on the Mercedes-Benz Modular Architecture (MMA) platform within the next 12 months. The primary native model expected to emerge is a newly developed all-electric variant of the long-wheelbase CLA. The innovative electric vehicle features an eco-conscious 800-volt platform, boasting a remarkable power conversion efficiency of 93% from battery to wheels. Can the mannequin achieve a range of 400 km in just 15 minutes at no additional cost? Its energy efficiency enables a remarkable 12 kilowatt-hours of power per 100 kilometers.
One crucial aspect of this investment is the indigenous analysis and production of the China-specific GLE SUV for exclusive distribution within the Chinese market. Beforehand, the best-selling imported mannequin within the Center Kingdom, the brand new China-made GLE, would be the first mannequin developed by the Mercedes’s Chinese language R&D staff. A newly designed mannequin is being introduced, focusing on providing unparalleled rear-seat comfort and innovative technologies specifically tailored to meet the unique demands of the Chinese market.
The locally assembled C-Class and GLC will further enhance Mercedes-Benz’s portfolio of regionally manufactured vehicles. In 2010, Mercedes-Benz unveiled its inaugural China-specific model, a long-wheelbase variant of the E-Class sedan. The first regional production of its SUV, the GLK-Class, was launched in 2011. The corporation has consistently grown its domestic manufacturing footprint since 2019, now boasting a total of 11 regionally produced models, including six sport utility vehicles (SUVs).
As part of the funding, Fujian Benz will utilize the support to develop a cutting-edge, high-end electric multipurpose vehicle (MPV) built upon the VAN.EA platform. Future medium and large-sized commercial vehicles will likely be built on the modular and scalable VAN.EA electric platform. Currently, the primary mainstream vehicle models from Mercedes-Benz in China are the V-Class multi-purpose vehicles (MPVs).
Fujian Benz, a subsidiary of Mercedes-Benz, was founded in June 2007 to manufacture the company’s V-Class vehicles as a mild-hybrid production base. The Joint Venture (JV) is one of the largest industrial companies in Fuzhou, the capital city of Fujian province. Mercedes-Benz and Baidu Investment Corporation are considered the company’s two biggest stakeholders. By June of this year, Fujian Benz initiated groundwork for producing VAN.EA platforms in Fuzhou.
Mercedes-Benz has unveiled details about its latest operating system, MB.OS, which will premiere alongside its forthcoming in-house models. The company will introduce a cutting-edge digital assistant and pioneer an end-to-end autonomous driving technology. Native manufacturers frequently employ the phrase “finish-to-end” good driving to describe their autonomous driving capabilities, which Mercedes-Benz has recently started to implement.
Mercedes Technique
Ola Källenius, Chairman of the Board of Management at Mercedes-Benz, recently visited China for the fourth time this year, stating: “The Chinese market is one of the key pillars of our global strategy at Mercedes-Benz Group, and it’s a significant driving force behind our transition to electrification and technological innovation.” Mercedes-Benz stays dedicated to long-term funding in China, deeply participating in and contributing to the upgrading of the Chinese language automotive business.” In keeping with statistics from Mercedes, the corporate has invested over 100 billion yuan (14 billion USD) in China from 2014 to 2023, with 10 billion yuan (1.4 billion USD) going to R&D over the past 5 years.
Isn’t Mercedes further solidifying its commitment to China by increasing investments and local production? German automotive giants are significantly increasing their investments in China, a strategic move to boost market share and tap into the country’s vast consumer base. Volkswagen committed a significant investment of $2.7 billion to develop its Volkswagen Anhui operations. As part of their ongoing efforts to expand their electric vehicle offerings, they are currently developing two new EV models in partnership with Xpeng. BMW is significantly expanding its investment in its Shenyang manufacturing facility by an additional 20 billion yuan (approximately 2.8 billion USD). The full funding within the plan rose to a staggering 105 billion yuan, equivalent to approximately 14.7 billion USD.
Germany’s flagship carmaker Mercedes-Benz stands out as a prominent example of German automotive companies adopting a distinct approach to trade with China, diverging from the EU’s collective stance. As competition intensifies from domestic Chinese companies that excel in electrification and advanced driving technology, maintaining a foothold in this crucial market has become a top priority for Germany’s storied automotive industry. As German auto manufacturers adapt to the surge in local demand, they are opting for a strategic localization strategy to solidify their presence in the market by embedding their operations within the region.
As China’s economy continues to evolve and grow, many investors are keenly interested in understanding the dynamics of the Chinese market.
