Daimler Trucks has announced it plans to build Mercedes Benz-branded heavy trucks in China by revamping truck plants owned by its local joint venture, according to news agency, Reuters
The plan will deepen the alliance between Daimler and its Chinese truck joint venture partner, Beiqi Foton and comes after the purchase of a 5 per cent stake in Daimler last month by its Mercedes Benz passenger car partner, Beijing Automotive Group, Foton’s parent company.
“Localisation 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,” a source told Reuters.
In 2016, Daimler’s then head of its truck business told German media that it planned to make Mercedes Benz-branded Actros heavy trucks in China by the end of the decade.
Under the plan, Beijing Foton Daimler Automotive (BFDA) will apparently add the Benz Actros to its production lines which are currently used to build Foton Auman trucks, the joint venture’s sole truck brand.
The joint venture plans to revamp its plant to enable an annual capacity of 60,000 heavy trucks, as well as expanding the capacity at a second plant from 60,000 to around 100,000 units annually.
All Mercedes Benz trucks currently sold in China are fully imported and priced significantly higher than domestically made trucks.
Daimler is seeking to further develop its truck business with Foton, but the lack of a solid supply chain in China apparently remains an obstacle.
“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 told Reuters.
China’s heavy truck market has fared better than the overall auto market this year, thanks to the growing e-commerce industry and improvements in traffic and logistics infrastructure.
There were 732,000 heavy trucks sold in China in the first seven months this year, down 1.4 per cent from the same period a year earlier, while the overall auto market dropped 13.5 per cent.