Mercedes Expands Romania Transmission Plant as Sales Jump

Daimler AG (DAI), the maker of Mercedes-Benz vehicles, started an expansion project at its transmission plant in Sebes, Romania, as the manufacturer ramps up its component supply to meet rising demand for luxury cars.

Daimler is spending more than 300 million euros ($411 million) to add production of a new nine-speed automatic transmission in 2016, the Stuttgart, Germany-based company said today in a statement.

Mercedes, the world’s third-biggest producer of luxury cars, has posted sales jumps exceeding 10 percent for nine consecutive months, including a 13 percent increase in March, as new compact cars and variants of the S- and E-Class sedans win buyers. Mercedes has added shifts at car factories, and its transmission plant in Stuttgart’s Untertuerkheim district was among sites that shortened year-end holidays in 2013.

“The additional assembly capacities in Sebes supplement our production operations at the Mercedes-Benz Untertuerkheim plant optimally,” Markus Schaefer, head of production, said in today’s statement. “They also are an important contributing factor in the economics and the flexibility of our international production network.”

Daimler Chief Executive Officer Dieter Zetsche is pushing for Mercedes to beat Bayerische Motoren Werke AG and second-ranked Audi AG in global deliveries by 2020, retaking the industry lead it lost to Munich-based BMW in 2005. Mercedes, the first among the three competitors to report sales for March, said today that its 158,523 deliveries for the period were the company’s best-ever monthly figures.

Labor Costs

Mercedes is adding capacity outside its home market in part to limit spending on production and distribution. Daimler opened its first plant for passenger-car engines outside Germany in Beijing in November to supply its plants in the world’s biggest car market. Mercedes production in China will double to more than 200,000 vehicles annually by 2015, Daimler said a week ago. Hourly labor costs in Romania are about one-10th the figure for Germany, according to the VDA German auto-manufacturers’ association.

Mercedes is scheduled to open a plant in Brazil by 2016 to make the next version of the mid-sized C-Class and compact GLA sport-utility vehicle for the local market, and it’s considering production in Russia. The plant in Brazil complements an 800 million-euro factory in Kecskemet, Hungary, that opened two years ago and builds the van-like B-Class and the CLA coupe. The Hungarian site is adding work shifts in May.

Daimler, which has been producing parts for engines and transmissions in Romania at a joint venture since 2001, will add about 500 jobs to the existing 1,200 posts, the German company said. The expansion includes training sessions for Romanian employees by counterparts based in Untertuerkheim.

To contact the reporter on this story: Dorothee Tschampa in Frankfurt at dtschampa@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net Tom Lavell

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