Mercedes to invest $4.1 billion in China production before 2015 image

Daimler AG plans to invest 27 billion yuan ($$4.1 billion) in expanding its annual production capacity and Mercedes-Benz sales network, and establishing its first engine plant outside Germany in China before 2015, its Chief Executive Dieter Zetsche said during his third visit to the country this year, reported Wednesday.

With the development of China’s auto market, Mercedes-Benz aims to boost sales to 300,000 units gradually in the country. Daimler AG earlier said that it will put 70% of its Mercedes-Benz vehicles into local production in China, which Dieter Zetsche said will become the European automaker’s largest market after four years.

Beijing Benz Automotive Co., Ltd, a joint venture between Beijing Automotive Industry Holding Co (BAIC) and Daimler AG, currently has an annual capacity of 100,000 vehicles, and will soon initiate a new project to expand its capacity of 200,000 vehicles, Dieter Zetsche said.

Sales of Mercedes-Benz vehicles in the Chinese market increased 129% from a year earlier to 14,000 units in October, attributable to strong sales of its Mercedes-Benz E-Class and S-Class cars. In the January to October period, the luxury brand saw its China sales jump 128% year on year to 115,330 units, according to a company statement released yesterday.

Mercedes-Benz has also raised its 2010 sales target for China to 120,000 units from 100,000 units.