Daimler to revamp China plant to make Actros trucks as sales surge

By Yilei Sun and Brenda Goh

BEIJING (Reuters) – Germany’s Daimler AG and its China commercial vehicle partner Beiqi Foton Motor Co plan to invest 2.75 billion yuan ($415.32 million) to build Mercedes-Benz-branded Actros heavy trucks for the first time in China, a document showed.

The partners plan to revamp plants at their joint venture Beijing Foton Daimler Automotive (BFDA) in China’s capital Beijing and add a production line, giving the plant a capacity of 50,000 Actros trucks a year, according to the construction document posted on the venture’s website.

A source familiar with the matter said the companies plan to embark on the revamp next year.

Foton had no comment and Daimler did not immediately respond to Reuters queries about the project.

All Mercedes-Benz trucks currently sold in China are imported and priced significantly higher than the venture’s domestically made Auman trucks.

The truck joint venture sold 111,788 Auman trucks, which have Daimler’s technology input, in the first 10 months this year, up 55% from same period last year.

Reuters reported the expansion plan in August last year. Sources familiar with the matter later said the progress was slow, citing product and supply chain planning, regulation approvals and the impact from COVID-19 pandemic.

Daimler said in 2016 it planned to make Actros trucks in China by the end of the decade but has not since publicly given updates.

Daimler, which has a passenger car joint venture with Foton’s parent BAIC Group [BEJINS.UL], sold around 700,000 passenger cars in China last year. Its chief executive said last month China will remain Mercedes-Benz’s biggest growth market in the next decade and it will adjust production locations to capture shifts in demand.

Overall truck sales in China, the world’s biggest auto market, jumped 24% between January and October to 3.87 million units, driven by government investment in infrastructure and as buyers upgraded to comply with tougher emissions rules.

But the market is largely dominated by local companies including FAW’s Jiefang , Dongfeng Motor and Sinotruk , which offer more price-competitive products.

International truck makers including MAN SE and Volvo trucks have engine partnerships with local companies.

($1 = 6.6214 yuan)

(Reporting by Yilei Sun and Brenda Goh; Editing by Kim Coghill)