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Mercedes could increase capacity at some China plants by 45%

BEIJING — Daimler’s main China joint venture with BAIC Motor that produces Mercedes-Benz cars plans to add a shift and working days at two Beijing plants that will boost nominal capacity by 45 percent, a document on the venture’s Chinese website showed.

The projected upgrade at Beijing Benz Automotive Co. (BBAC), 49 percent-owned by Daimler, was set out in a document posted on the BBAC website last month to seek public opinion on the expansion.

It comes as demand for Mercedes vehicles surges in the world’s biggest car market. China is the brand’s biggest country business, with more cars sold there than in Germany and the U.S. combined.

Last year, the venture sold a record 611,000 vehicles in the country, up 8 percent from 567,000 in 2019.

The document did not specify the base capacities of the factories, but the company has previously said combined capacity of the two plants was 520,000 vehicles a year.

According to the document, the joint venture will increase working days to 312 per year at both of its Beijing plants. Previously, one plant, known as the MRA factory, had 290 days of output per year while the other, the MFA factory, had 250 days.

One of the plants will also add one 7.5-hour shift per working day, according to the document, which did not specify the investment related to the capacity increase at the two factories, which plan to make gasoline and electrified vehicles.

BBAC, which declined to comment on the projected upgrade, also has a separate electric-vehicle factory in Beijing with capacity of 150,000 cars per year.

The venture is 51 percent-owned by BAIC Motor. BAIC’s parent, BAIC Group, which owns 5 percent of Daimler, did not answer Reuters’ questions on the capacity upgrade project.

Aside from BBAC, next year Daimler will start making electric Smart cars with China’s Geely, which holds a 9.7 percent stake of Daimler, the companies said in 2019. It also has a truck venture with another BAIC Group unit, Beiqi Foton.

Chinese policymakers expect 20 percent of overall new vehicle sales will be full-electric, plug-in hybrid or fuel cell vehicles in 2025.

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