Daimler Truck, Foton begin production of Mercedes-Benz Trucks in China

Daimler Truck and Beiqi Foton Motor have announced that both partners will produce and distribute Mercedes-Benz heavy-duty trucks for an advanced market segment in China.

Based on Daimler Trucks’ global platform strategy, the companies’ joint venture Beijing Foton Daimler Automotive (BFDA) will localise new heavy-duty tractor models ‘Made in China for China’, and fully adapted to local customers’ requirements. The vehicles will get state-of-the-art Daimler Trucks technology. The production of the heavy-duty tractor models is scheduled to begin in two years in a new truck plant in Huairou, Beijing and will be owned by BFDA. The joint venture will invest more than 3.8 billion RMB (Rs 4,016 crore) 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 meet the local customers need for top-of-the-line trucks for special applications such as concrete pumps.

The new heavy-duty Mercedes-Benz tractors for China will fully capitalise on Daimler Trucks’ platform strategy and will be powered by a state-of-the-art engine from Daimler Trucks global powertrain unit. The new Mercedes-Benz tractors will be fully adapted to the specific requirements of varied Chinese customers.

The partners plan full-fledged local production to start operation in two years from now, supported by a local supplier base, which will be further strengthened over the coming years.

Martin Daum, CEO, Daimler Truck said: “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. We’re convinced what we’re announcing today 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, responsible for Greater China: “We 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 localization strategy but also an excellent example of Sino-German cooperation.”

Sven Ennerst, member of the Board of Management Daimler Truck, responsible for Product Engineering, Procurement and region China: “By locally producing Mercedes-Benz tractors for the growing advanced truck segment we will introduce our heavy-duty product platform to the Chinese market, adjusting it perfectly to the needs of our Chinese customers. The vehicles will be equipped with our leading Daimler Truck technology. This shows our clear and long-term commitment to the Chinese truck market. Together with our Partner Foton, we will keep working determinedly and consistently to further expand our presence in China.”

Gong Yueqiong, CEO, Foton Motor said: “The inauguration of Beijing Foton Daimler Automotive in 2012 marks 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.”

According to the OEM 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. Daimler Truck says China forms an important part of its 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.

At present, 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. 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 very high 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 instance fuel efficiency, reliability, state-of-the-art safety systems as well as total cost of ownership (TCO) and lifetime value.