Ground Broken on BBAC’s New Plant for Producing Mercedes-Benz Compacts

The foundation stone was laid for "BBAC Phase II" in Beijing on Tuesday, a plant for building Mercedes-Benz compact models based on Daimler’s MFA platform. The new factory will expand the joint venture’s production base in Beijing Economic-Technological Development Zone, which already includes a vehicle plant (making Mercedes-Benz C-, E-, and GLK-Class), an engine plant under construction, and a R&D center, all lying along the sixth ring road in the south of the city.

beijing benz factory

According to an agreement signed in June 2011, BAIC and Daimler would invest 2 billion Euros in the following five years to triple Beijing Benz (BBAC)’s vehicle production capacity to 300,000 units a year, build an engine plant with a 250,000-unit capacity, and raise local R&D capacity.

To be completed in late 2014, the new vehicle plant is going to roll out three compact models based on the MFA platform: the Mercedes-Benz A-Class, the B-Class, and a crossover SUV. The engine plant, scheduled to open next year with an initial capacity of 100,000 units a year, will have a product line featuring the M270, M274, and M276. The M270 transverse engine, be a 1.6 or 18 liter, is expected to power BBAC’s future compacts.

In the first eight months of this year, sales of Mercedes-Benz brand cars in China rose 6.2% from a year earlier to 127,700 (of which 51,100 were made by BBAC, up 26.7% on year), lagging far behind those of Audi (261,500) and BMW (192,800).