Daimler signed a joint venture with Beijing Automotive Industry Corporation, the company will be named Beijing Benz Automotive Co, Ltd. (BBAC).
“With this framework agreement, we are laying the essential strategic foundations for our long-term and significant participation in the growth of the key market China. The projects agreed upon are further central elements of our China strategy for the sustainable development of our business. As early as 2020, at least one in five premium compact cars is expected to be sold in China. In the light of this enormous growth potential, we are resolutely switching to attack mode with the local production of our new compacts,” said Dieter Zetsche, the company's Chairman of the Board of Management.
The partnership will put €2 billion to be invested in the new company. Aside from that, the agreement also includes local production of the GLK SUV and three future models of Mercedes compact cars. A new plant where 4-cylinder gasoline engines will also be put up in about 2 years, this will supply the engine needs of the Mercedes-Benz cars that will be produced in China. This plant is anticipated to produce about 250,000 units.
Source: Benz Insider.
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