Added investment proves Daimler's commitment to China

German automaker Daimler AG signed a 4 billion yuan ($607.4 million) deal with its Chinese partner BAIC Motor to expand the engine plant at their joint venture Beijing Benz Automotive Co, to increase the company's local footprint and ensure its sustainable growth in China.

The strategic framework agreement was signed in the presence of German Chancellor Angela Merkel and Chinese Premier Li Keqiang in Beijing on Monday.

"This agreement on further investment marks a successful beginning of the second decade of our partnership with BAIC," said Hubertus Troska, member of the board of management of Daimler AG responsible for Greater China. "With our Mercedes-Benz products 'Made in China, for China' at BBAC, we are confident in our growth in the world's largest car market.

With a wide range of products and services, Daimler's strong growth in China has been attributed in large part to the Stuttgart-based company's emphasis on tailoring their offerings to the needs of Chinese consumers.

Meeting local needs

Daimler is increasingly dedicated to localization. Over two-thirds of the Mercedes-Benz cars sold in the first quarter of 2016 in China were made in the country.

After a decade of cooperation with BAIC, locally made models now include the E-Class, C-Class, GLC and GLA, with the long-wheelbase all-new E-Class soon to roll of the production line.

The integrated sales organization, Beijing Mercedes-Benz Sales Service Co Ltd, has been the leader in growth in the premium automobile market in China since its 2013 establishment.

"Together with a great dealer network, we are able to introduce products and customize our service initiatives specifically for our Chinese customers and, in return, we have managed 39 months of consecutive growth in China," said Nicholas Speeks, president and CEO of BMBS.

To meet its "Made in China, for China" commitment, Daimler has focused increasingly on developing products locally, with 700 qualified engineers and designers working in China.

It also has plans to further expand its research and development facilities in Beijing, with about 870 million yuan having been invested in such facilities in the capital for Mercedes-Benz passenger cars in recent years.

This localization extends also to Fujian Benz Automotive Co, a joint venture that houses the first R&D center for Mercedes-Benz vans outside of Germany. In March, it launched the new V-Class multipurpose vehicle in China.

In addition to its passenger vehicles business, Daimler Trucks has a strong presence in the Chinese truck market.

As part of the joint venture Beijing Foton Daimler Automotive Co Ltd, Daimler and Foton have been locally manufacturing medium- and heavy-duty trucks under the Auman brand since July 2012 for the volume segment, primarily in China. The independent company Daimler Trucks and Buses China Ltd imports and sells Mercedes-Benz trucks for the premium segment.

For both dealer partners and individual customers, Mercedes-Benz Financial Services China provides tailored solutions and innovative and flexible services covering all Daimler vehicle sales in China.

More than three out of 10 Mercedes-Benz cars have been purchased in China using financial services. With a 31 percent year-on-year increase of net portfolio by May 2016, the penetration rate for cars has reached around 36 percent.

Innovative solutions

The new E-Class L, set to launch exclusively in China this autumn, is the first production model to be equipped with Car-2-X Communication, allowing the vehicle to detect traffic conditions and store them in the cloud before sending the information to other vehicles as a warning.

Car-2-X Communication is just one example of how the internet and connectivity are rapidly changing everyday life, especially in China.

Innovative new-energy vehicles are an important part of Daimler's portfolio. In 2014, Shenzhen BYD Daimler New Technology Co, a joint venture between Daimler and BYD, introduced the electric Denza marque to China.

With nearly 3,000 units sold in 2015, Denza has maintained strong growth in the high-end electric vehicle market, providing reliable electric mobility solutions to Chinese customers.

New mobility solutions from Daimler are helping provide new choices for China's urban residents. The world's first and largest free-floating car-sharing service car2go was launched with 400 cars in Chongqing in April.

In less than two months, more than 78,000 people registered with the service and 40,000 rentals were made, the equivalent of one car2go vehicle rented every 1.7 minutes in Chongqing.

Investing in people

Daimler has more than 20,000 employees at its wholly and jointly owned companies in China. Local vocational training initiatives provide a German dual-educational system adjusted to local conditions in conjunction with local partners.

To further support local talent, Daimler has for over 20 years supported promising students at Peking University, benefiting 480 students by the end of 2015.

The German automaker makes it a mission to be one of the best corporate citizens. The company, with the Mercedes-Benz Star Fund, has engaged in many efforts, from education in underdeveloped regions to disaster relief and road safety courses, with a total investment of 115 million yuan.

lifusheng@chinadaily.com.cn