Strategic investment: Mercedes-Benz Cars pushes electric initiative in South-East Asia with battery production in Thailand

With a strategic decision Mercedes-Benz Cars is enhancing the manufacturing footprint in South-East Asia addressing growing demand for electric mobility in the region. Together with local partner Thonburi Automotive Assembly Plant (TAAP), the German carmaker will invest a total of over 100 Million Euros in the production operations in Bangkok until 2020. The investment will …

With a strategic decision Mercedes-Benz Cars is enhancing the manufacturing footprint in South-East Asia addressing growing demand for electric mobility in the region. Together with local partner Thonburi Automotive Assembly Plant (TAAP), the German carmaker will invest a total of over 100 Million Euros in the production operations in Bangkok until 2020. The investment will go into an extension of the existing car plant and into a new battery assembly built on the site ensuring availability of cutting-edge technology for electrified and “EQ Power” Plug-In Hybrid vehicles produced in Thailand. “The electric initiative in the flexible and efficient global production network of Mercedes-Benz Cars is progressing well and with ultimate speed. As part of our strategy, we are now preparing for the future of electromobility in Thailand together with our partner TAAP. With our highly standardized and scalable battery production concept we are able to start operations in any region at short notice and at the right size. The battery production in Thailand will enhance our global battery production network to six factories on the three continents,” states Markus Schäfer, Member of the Divisional Board of Management Mercedes-Benz Cars, Production and Supply Chain.

Thanks to a standardized production and plant concept, the battery production concept of Mercedes-Benz Cars can be scaled in such a way that various value-added stages as well as production concepts can be implemented flexibly and in line with the markets worldwide.

Dr. Uttama Savanayana, Minister of Industry in Thailand: “ Mercedes-Benz is one of the world’s biggest carmakers and a leading manufacturer in Thailand with its world-class standards of products and services. The company’s investment in Thailand generates a currency inflow and contributes to the economic, technological and social developments of our country. Mercedes-Benz has applied for promotional privileges for its new investment in Plug-In Hybrid electric vehicle (PHEV) production, which coincides with Thailand’s automotive industry development towards the future of electric vehicles and supply chain development. This new move reflects the confidence that the German carmaker has in Thailand as its key production base in this region. The investment will also bring to Thai people an opportunity to heighten their competence with better know-how and higher technologies than conventional auto-part production, which will contribute significantly to the progress of Thailand’s automotive industry and drive the nation’s development strategy towards tangible results.”

By 2022, Daimler will electrify the entire portfolio of Mercedes-Benz, offering customers at least one electrified alternative in all segments from compact cars to large SUVs. The company is planning to offer more than 50 electrified vehicle variants. Mercedes-Benz will be continuously supporting the development of Plug-In Hybrids and the introduction of 48-volt-systems. The first EQ series model- the EQC – will go into production in 2019 in Bremen, Germany. The product and technology brand EQ is an integral part of CASE, which stands for the intelligent combination of the strategic pillars of connectivity (Connected), autonomous driving (Autonomous), flexible use (Shared & Services) and electric drive systems (Electric).

Sixth Mercedes-Benz factory to produce batteries

The battery production in Bangkok will be part of the global battery production network of Mercedes-Benz Cars for local demand and export. In total, Daimler will invest more than one billion Euros in the battery production network, which will also include production facilities in Germany, the U.S. and China. As in vehicle production, the battery production network will react flexibly and efficiently to market demand. This strategy ensures the ongoing availability of modern battery technology through local production hubs and puts Mercedes-Benz in a highly competitive position for its electric initiative. Local production of batteries in Thailand is planned to start by 2019.

Confidence in the potential of Thailand’s passenger car market

Part of the joint investment of Mercedes-Benz Cars and local partner TAAP is the extension of the existing car plant leading to a substantial increase in the production portfolio, adding new models.

Michael Grewe, President and CEO of Mercedes-Benz (Thailand) Limited: “At Mercedes-Benz Thailand, we are committed to offering ‘ THE BEST’ to our customers today and tomorrow. The current investment reflects our confidence in the potential of Thailand’s passenger car market, especially for Plug-In-Hybrid Models. Our current portfolio is extremely popular with our customers and we are pleased to continue offering a broad portfolio of locally produced vehicles in future.” In 2017, thanks to a double-digit growth rate Mercedes-Benz achieved its highest ever unit sales in Thailand with more than 14,000 units sold. The best-selling models were the E-Class Saloon, the C-Class Saloon and the CLA Coupé. Mercedes-Benz Thailand currently offers a range of nine locally-assembled models. Plug-In Hybrid models are particularly popular, with the C- and S-Class and the GLE Plug-In Hybrids (fuel consumption combined, combined CO₂ emissions: 2.4-2.1 l/100 km, 54-48 g/km; 2,8 l/100 km, 65 g/km; 3,3 l/100 km, 78 g/km) and most recently launched, the E 350e Avantgarde, E 350e Exclusive and E 350e AMG Dynamic (fuel consumption combined: 2,1 l/100 km; combined CO₂ emissions: 78 g/km). Mercedes-Benz has been market leader amongst premium manufacturers in Thailand for 17 years in a row, since 2001.

Crucial for the success story of Mercedes-Benz in Thailand is the close cooperation of Mercedes-Benz Manufacturing Thailand and partner TAAP, who operates the plant in Bangkok. In 2017 alone, TAAP produced over 12,000 cars for Mercedes-Benz. The plant currently employs over 1.000 people. It is expected that, once completed, the investment will create more than 300 additional jobs at the site, thereof nearly 100 for battery production alone.

Andreas Lettner, CEO Mercedes-Benz Manufacturing Thailand: “With the expansion of our plant and the future production of batteries here at the Bangkok site, we are once again intensifying our cooperation with TAAP and preparing ourselves for the future of mobility. This is also a great opportunity for our employees, who will be trained for their new, highly qualified tasks in order to be optimally prepared for future state-of-the art technologies. We are committed to strengthening our regional footprint and the successful collaboration with our Thai partners. The cooperation with TAAP, our local partners and the Thai authorities is excellent and we receive the support that we need in order to be able to continue producing successfully.”

Mercedes-Benz ensures that all vehicles produced in the global production network of Mercedes-Benz Cars meet the high quality standards of the brand wherever they are produced. During the ramp-up of new models or technologies, employees in Thailand are supported by an experienced team to familiarize themselves with the production processes.

Mr. Veerachai Chaochankij, Managing Director of Thonburi Automotive Assembly Plant Company Limited: “TAAP is proud to be entrusted by Mercedes-Benz Manufacturing Thailand as the manufacturing partner for the new site in the global battery production network of Mercedes-Benz Cars. Our new battery factory is being built on a land plot of 30 rai (48.000 m2) near the existing car assembly plant of Mercedes-Benz in Thailand. It will meet battery demand for Plug-In Hybrids in the Thai market. The production will start at the beginning of 2019. We are aware that competencies of production staff are vital to the global production network of Mercedes-Benz Cars. With a firm commitment to quality production grounding on our strong belief in people, network and high workmanship, production competencies of our people will be reinforced with relevant skills and technical knowledge in Plug-In Hybrid batteries. As part of our preparation for the start of production, this will ensure that the quality of batteries from this Thai production is second to none globally”.

About Mercedes-Benz Cars Operations

Mercedes-Benz Cars Operations is responsible for passenger car production at over 30 locations around the world. Three of them are currently being established. Within a flexible and efficient production network with around 78,000 employees it includes the central functions of production planning, TECFACTORY, logistics, and quality. Mercedes-Benz Cars produced more than 2.4 million Mercedes-Benz and smart passenger cars last year, marking the seventh record in a row. The network is based on the product architectures of front-wheel drive (compact cars) and rear-wheel drive (for example the S-Class, E-Class, and C-Class) as well as the SUV and sports car architectures. In addition, there is a powertrain production compound (engines, transmissions, axles and components). Each of these production compounds is grouped around a lead plant that serves as a center of competence for the ramp-up of new products, technology and quality assurance. Mercedes-Benz Cars is ready for the electro mobility: Around the globe electro hubs are built for the production of electric vehicles and batteries. The focus of day-to-day work is on the continuous improvement and refinement of state-of-the-art production methods, which allow future high-tech vehicles to be produced in a way that is efficient, flexible and environmentally friendly, according to the typical Mercedes-Benz quality standards. All of this revolves around the employees and their expertise, whose work is systematically supported by ergonomic workplace design and intelligent automation. In addition to its own production plants, Mercedes-Benz is increasingly leveraging partnerships and utilizing capacities at contract manufacturers as part of its growth strategy.

About Mercedes-Benz Manufacturing Thailand

The Mercedes-Benz Thailand plant is located in the Bangkok region, where local production started over 40 years ago with the model W123. The site is part of the global production network of Mercedes-Benz Cars. In Thailand, local partner TAAP currently operates the plant, which includes assembly, body shop and paint shop. Its production portfolio currently comprises nine models: the CLA Coupé; the GLA; the C-Class Saloon; the C-Class Coupé; the E-Class Saloon; the S-Class Saloon; the GLC; the GLC Coupé and the GLE. In 2017 alone, TAAP produced over 12,000 cars for Mercedes-Benz. The plant currently employs over 1.000 people.

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