Mercedes Touts Three-Prong Approach to Production

Daimler AG’s Mercedes-Benz Cars unit tells Bloomberg News it will manage capacity expansion with a three-option system that includes working with joint ventures, hiring contract assemblers and adding its own facilities when necessary.

Markus Schaefer, who heads production for Mercedes, notes the company will meet demand for its new GLC crossover vehicle by supplementing in-house output with units built by Finland-based contractor Valment Automotive Oy. Beginning in 2017 Valmet will build about 100,000 of the cars under a multi-year deal.

Daimler also relies on Valmet to make Mercedes A-Class mini-hatches. The Finish company is delivering 100,000 units between 2013 and 2016. In addition, the company builds Sprinter commercial vans in Russia through its joint venture with OAO GAZ.

Schaefer tells Bloomberg the company will expand its own capacity “when we need it” to support Mercedes’ aim to surpass rival BMW AG as the world’s largest luxury car brand.