Daimler and GAZ to Begin Production of Mercedes Vans in Russia image

Daimler and Gaz, a Russian commercial vehicle manufacturer, have planned to begin production of Mercedes-Benz Sprinter at Gorky Automobile Plant in Nizhny Novgorod, Russia.

Negotiations on this plan began after a Memorandum of Understanding, signed at the end of 2010, and the two companies have sealed the agreement in May 2012, to localize the Mercedes-Benz Sprinter T1N, as well as the engine and other components. Daimler plans make an investment of more than €100 million, while GAZ will invest over €90 million, in the product production and sales processes. Both companies plan to produce Mercedes-Benz engines at GAZ Group’s Yaroslavl facility, built an the end of 2011 to manufacture YaMZ-530 Euro-4 engines.

“The partnership with GAZ will take us a big step forward in the promising Russian van market. For Mercedes-Benz Vans, Russia is an important future market that offers us good growth opportunities. That is why we want to produce our vans for Russia locally and cater to local customer preferences,” said Volker Mornhinweg, Head of Mercedes-Benz Vans.

Analysts predict that by 2020 Russia will become one of the world’s largest midsize and large van sales markets, with almost 300,000 units sold annually, from the current 150,000.