After at least two years of trying to determine what it was going to do about its next-generation Mercedes-Benz A and B-class compacts, Daimler has announced that it will commit €600 million to update and expand the factory that builds them. We still don't know what platform Mercedes will use for the new small cars, but they will start production at the Rastatt factory in late 2011. Part of the updates to the factory will include a 710,000 square foot body shop to produces the shells of the new models. Mercedes has already started construction of a stamping facility in nearby Kuppenheim to produce the panels that will be welded at the Rastatt body shop.
The next-generation compacts will also add two new body configurations in addition to the current hatchback body styles. No information has been provided but the most likely candidates are some sort of taller wagon/MPV to compete against the likes of the VW Touran or Ford C-Max or a sedan which could mean the introduction of the small cars to the U.S. market.
Daimler CEO Dieter Zetsche also announced that low-volume production of a battery electric A-Class E-Cell will start in late 2010. We contacted Tesla spokeswoman Rachel Konrad to see if they will be supplying batteries or other components for the A-Class BEV as they are for the smaller Smart ED but she declined to comment on the matter. Given Daimler's investment in Tesla, it would certainly make sense to the have the California company provide those systems. If so, that could help Tesla keep revenues flowing (Roadster sales have apparently slowed) until the Model S comes on stream.
Daimler invests EUR 600 million in center of excellence for compact vehicles
Rastatt, Germany, October 22, 2009
Dr. Dieter Zetsche: "With this significant investment we are defining our future in the compact car segment and safeguard the plant Rastatt in the long term."
In 2009 and 2010, Daimler will invest a total of about 3 billion euros in German passenger car locations
Mercedes-Benz is further expanding its center of excellence for compact vehicles by enlarging its Rastatt plant with an investment of 600 million euros. In addition, a further 800 million euros will be invested in a new plant at the Hungarian location of Kecskemét. The Company's total investments for these two locations thus amount to approximately 1.4 billion euros. The first vehicles of the successor generation to the current A- and B-Class will roll off the assembly lines in Rastatt from the end of 2011.
"With this significant investment we are defining our future in the compact car segment and safeguard the plant Rastatt in the long term. In addition, we will continue to invest in our locations in Germany – about EUR 3 billion in 2009 and 2010 alone," said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars. "The expansion of the Rastatt plant illustrates our clear commitment to our center of excellence and the excellent work of the Rastatt employees," continued Zetsche.
"The expansion of the Mercedes-Benz plant in Rastatt is a symbol of our country's innovative capability and export strength. At the same time, is it also a signal to continue to invest particularly in times of crisis, thus maintaining and creating technology jobs for the future," said Baden-Württemberg Finance Minister Willi Stächele on the occasion of the plant expansion in Rastatt.
An additional production hall, in which construction for the plant equipment for body shells will begin soon, has been built as an auxiliary to the existing building facilities in Rastatt. To enable part deliveries and unloading directly at the production site, a direct train connection is planned for the hall. The new body shell hall has an area of approximately 66,000 m2. This is where parts from the local region will also be installed: The groundbreaking ceremony for a new Mercedes-Benz press shop for production, among other things, of exterior parts for the follow-up generation to the A- and B-Class from 2011 was held in the nearby town of Kuppenheim in June. The total investments for the Kuppenheim press shop amount to around 70 million euros.
With the expansion of its product line in the compact vehicle segment, in future Mercedes-Benz will be offering four models instead of the current two with a view to acquiring new customer groups and growing in additional markets. The future models will also offer product features like generous interior space, which are already popular with customers of the A- and B-Class. In addition, further variants and designs will set new trends.
The construction work in Kecskemét, Hungary began a few days ago with the official ground-breaking ceremony. The building for vehicle paintwork at the new factory is being constructed first, followed by the body shop and the assembly hall starting early next year. Both plants together form a coordinated production network. The first models of the successor generation will be produced in Rastatt from the end of 2011, and the production ramp-up in Hungary is planned for 2012.
"Production costs are a key factor in the competitiveness of the price-sensitive compact vehicle segment: The coordinated production network of the Rastatt and Kecskemét plants will make a key contribution to this," said Rainer Schmückle, Chief Operating Officer of Mercedes-Benz Cars. "In future, three of four vehicles of the successor generation to the A- and B-Class will come from the Rastatt plant location, which will remain a central proven component of our production network."
With the A- and B-Class, Mercedes-Benz is already a successful premium manufacturer of compact vehicles. Since the A-Class entered production in 1997 and the B-Class in 2005 over 2.4 million A- and B-Class vehicles have rolled off assembly lines. Between 2002 and 2005 Daimler AG invested about 900 million euros in the Rastatt plant for the second generation of the A-Class and the B-Class.
The most important markets for the compact vehicles from Rastatt are Germany, Italy, France and the UK. In addition, this year the B-Class was successfully launched in China where it has gained a market share of 25%, significantly above expectations.
From the end of 2010 production at the Rastatt plant will also be expanded with small series production of the electrically-operated A-Class E-Cell. Peter Wesp, head of the Mercedes-Benz plant in Rastatt: "Small series production of the A-Class E-Cell will once again prove the expertise of the Rastatt plant in premium compact vehicles. The employees are also intensively preparing for the successor generation of the A- and B-Class – we are thus well-prepared and highly motivated for the future."
The Rastatt plant is Mercedes-Benz' center of excellence for compact vehicles, with around 5,700 employees. The production start of the A-Class marked a new generation of vehicles in 1997. The Mercedes-Benz B-Class has also been rolling off the assembly lines in Rastatt since 2005, with a production of more than 500,000 vehicles to date. Both compact vehicles appeal to customers mainly with their unique security concept, spacious interiors and excellent variability.