"According to current national regulations, Mercedes-Benz vehicles manufactured in Beijing must achieve a 40% localization rate. However, due to the fact that the annual production of 20,000 sedans is insufficient to meet the supply targets of its local parts suppliers, Mercedes-Benz has been actively seeking domestic vendors that can meet its high-quality standards," said An Qingheng, chairman of Beijing Auto Holdings Co., Ltd., during an interview with a reporter.
An Qingheng further explained that all components used by Mercedes-Benz in China must satisfy two key criteria: first, they must strictly comply with the brand's quality and technical requirements; second, they must align with the "Auto Industry Industrial Policy" issued in 1994 and still in effect today. The policy mandates a 40% localization rate for car parts, which has spurred the development of three major auto parts industrial parks in Beijing. These include the Shunde Park supporting Beijing Modern, the Changping Park near Futian, and the Yizhuang or Tongzhou Park serving as a hub for Mercedes-Benz.
Industry insiders speculate that a new version of the "Auto Industry Industrial Policy" may be released soon. Early signals suggest that the 40% localization requirement could be relaxed. If this happens, it might significantly alter the landscape for Mercedes-Benz’s local parts sourcing strategy, potentially opening up more opportunities for international suppliers. (Li Yang)
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