Beijing Benz Automotive Company (BBAC) has begun construction work at its plant in Beijing, as part of the second phase of its expansion project, the automaker said. The new facility will be used by BBAC, a joint venture between Daimler and state-owned automaker Beijing Automotive Group (BAIC Group), to produce Mercedes-Benz compact cars in China.
Vehicles of this new generation Mercedes-Benz compact cars are slated to begin rolling off the production line in 2014. Daimler AG board member Wolfgang Bernhard, who is responsible for manufacturing and procurement at Mercedes-Benz Cars and Mercedes-Benz Vans, said: “Our new compacts are so popular with customers that we will add BBAC as the third pillar of our compact car production network besides the Rastatt and Kecskemét plants, in the context of our Mercedes-Benz 2020 growth strategy.”
 
In 2011, Daimler and BAIC entered into an agreement to expand capacity at BBAC to include local production of compact cars in China for the Chinese market. A new plant is already under construction for the production of 4-cylinder gasoline engines. Production at the new plant is set to begin in 2013. A new research and development (R&D) center is also under construction, which will be used for vehicle testing in China.
IHS Automotive said that the current BBAC plant’s production capacity of 100,000 units per year will increase to 300,000 units per year after the expansion. The plant will produce the A class, B class and the GLA sports utility vehicle, all off the MFA platform. BBAC, which wants to increase local production in China to 420,000 units by 2015, will introduce at least one new model per year to its locally produced line-up. (September 27, 2012)