Daimler Truck AG and Foton start joint production of Mercedes-Benz Trucks in China for China

In News, Daimler, Mercedes-Benz6 MinutesBy NZ Trucking magazineDecember 3, 2020

Daimler Truck AG and Beiqi Foton Motor Co., Ltd have jointly announced that both partners will produce and distribute Mercedes-Benz tractors for an advanced market segment in China. Based on Daimler Trucks‘ global platform strategy, the companies‘ joint venture Beijing Foton Daimler Automotive Co., Ltd. (BFDA) will localise new heavy-duty tractor models ‘Made in China for China‘, fully adapted to Chinese customers‘ requirements. The vehicles will get state-of-the-art Daimler Trucks technology. Start of production of the heavy-duty tractor models is scheduled in two years from now in a new truck plant in Huairou (Beijing) owned by BFDA. The joint venture invests of more than 3.8 billion RMB (over 485 million euros) for the acquisition of the plant and the set-up of new infrastructure and production lines.

At the same time Daimler Truck will continue to import and sell other models of its Mercedes-Benz portfolio both through the existing dealer network and direct wholesale to answer the customers need for top-of-the-line trucks for special applications – for example concrete pumps for China‘s rapidly growing construction sector.

Daimler Trucks and Foton plan for local production to start in two years‘ time, supported by a local supplier base, which will be further strengthened over the coming years. Details on the product specifics and its market introduction will be announced at a later time.

“At Daimler Trucks it‘s our strategic goal to lead globally and to create value for our customers around the world. China, the world‘s largest truck market, is of utmost importance to us and has become one of our important markets for future growth. In order to make full use of this potential, we made the decision to locally produce Mercedes-Benz heavy-duty tractors in China for China,” said Daimler Truck AG CEO Martin Daum. “We‘re convinced what we‘re announcing is the right strategic move for the right market at exactly the right point in time.”

Hubertus Troska, member of the board of management of Daimler AG, responsible for Greater China, said they aim to grow in China and with China.

“That applies to our passenger car as well as our commercial vehicle business. The Chinese truck market is undergoing a transformation, especially in the long haul transportation market. The growing e-commerce and logistics industry offer great opportunities. We believe in the further growth potential of the truck market in China and we are determined to contribute to its long-term development. Today not only marks a big milestone in Daimler‘s localisation strategy but also an excellent example of Sino-German cooperation.”

Gong Yueqiong, CEO of Foton Motor, said the inauguration of Beijing Foton Daimler Automotive Co., Ltd in 2012 marked a historic step made by Foton and Daimler.

“The current localisation project of a Mercedes-Benz heavy-duty truck is an evolution and upgrade of Foton Daimler cooperation and the right strategic move of further developing Chinese market. Tailor-made for China, the localised heavy-duty truck originates from Mercedes-Benz‘ latest global platform and boasts the latest and most advanced Daimler Trucks technology for heavy-duty trucks. The project will help BFDA form a competitive product mix and provide more diversified product solutions and choices to Chinese customers.”

The Chinese market for heavy-duty trucks had a volume of 1.1 million units in 2019. For 2020 it is to be expected that more than half of the trucks sold globally will be registered in China. China forms an important part of Daimler Trucks‘ global platform strategy, and through the domestic production of Mercedes-Benz and Auman trucks in China the company will further leverage the potential of the world‘s largest truck market. Looking ahead, China sales are expected to increasingly contribute to Daimler Trucks‘ global development.

Today, Daimler Trucks is pursuing a two-fold strategy in the Chinese market. On the one hand, Mercedes-Benz Trucks are exported to China and Daimler Trucks is a market leader in the heavy-duty segment for imported trucks – the vast majority are trucks adapted to special applications, for example concrete pumps. On the other hand, BFDA addresses the local market of value and price-driven trucks by producing trucks in China with the Auman brand. Adding to the local strategy substantially, BFDA will produce Mercedes-Benz heavy-duty tractors, targeting another customer segment in the Chinese market, which is currently evolving at a rapid pace: the local market for advanced heavy-duty trucks. The locally produced vehicles will be equipped with the leading Daimler Truck technology, addressing the customer needs in the segment of advanced trucks – for example fuel efficiency, reliability, state-of-the-art safety systems as well as total cost of ownership and lifetime value.