According to current national regulations, Mercedes-Benz vehicles produced 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 production targets of its local parts suppliers, Mercedes-Benz has opted to select suppliers within China that can meet its high-quality standards, said An Qingheng, chairman of Beijing Auto Holdings Co., Ltd., in an interview with a reporter.
An Qingheng further explained that all components used by Mercedes-Benz must satisfy two key criteria: first, they must fully comply with the brand’s strict quality and technical requirements; second, they must also align with the "Auto Industry Industrial Policy" issued in 1994 and still in effect today. This policy mandates a minimum 40% localization rate for car parts.
As part of this strategy, Beijing is expected to develop three dedicated auto parts industrial parks. These will be strategically located around key manufacturing hubs—Shunde Park supporting Beijing Modern, Changping Park near Futian, and Yizhuang or Tongzhou Park near the Mercedes-Benz plant.
Industry insiders speculate that the new "Auto Industry Industrial Policy" may soon be released, and there are signs that the 40% localization requirement could be relaxed. If this happens, it could significantly alter the landscape of Mercedes-Benz’s local supply chain, potentially opening up more opportunities for international suppliers. (Li Yang)
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