Daimler AG, the parent company of Mercedes-Benz, the third largest premium brand in the world, has announced it would spend billions of euros in the near future to refresh a key assembly facility.
The German automaker is unraveling a strategy that calls for the adjustment of its facilities to cater for the growing need of implementing fuel-efficient powertrains, a key drive to achieve tougher environmental and fuel efficiency mandates in Europe, the US and other parts of the world. Daimler will use one billion euros ($1.06 billion) in 2015 alone to update the plant in Untertuerkheim, tasked to produce engines, transmissions and axles for Mercedes-Benz models. “We are not only improving our flexibility and efficiency, but also developing a plant with a tradition stretching back over 110 years into a high-tech location for CO2 technologies,” commented Markus Schaefer, chief of production at Mercedes-Benz Cars. The company added that agreements reached with labor officials will maintain the plant’s employee base stable at about 18,700 people and also bring cost savings “in the range of hundreds of millions of euros until 2020.”
The Untertuerkheim plant has been running for years at high level of utilization, making it extremely profitable and showing the Mercedes-Benz’s massive expansion in the near past. Germany’s top three premium automakers – the leaders of the worldwide luxury segment in terms of sales – have been hard at work developing more efficient powertrains – including alternative options such as hybrids, plug-in hybrids and battery-powered electrics.