Daimler Building Engine Plant in Poland

Company continues to expand global footprint.

by on Oct.14, 2016

Daimler is building a plant in Poland that will produce four-cylinder engines starting in 2019.

Daimler AG has announced plans to spend $560 million to build a new engine plant in Jawor, Poland.

“The capacity expansion in Poland reflects the increasingly international character of our powertrain production compound. This will lead to increased flexibility and efficiency within our worldwide production network of Mercedes-Benz Cars,” said Markus Schaefer of Mercedes-Benz Cars, Production and Supply Chain Management, who made the announcement at a press conference in Warsaw.

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Schaefer added the new plant, which is 45 miles west of Wroclaw, was part of the company’s strategy for growth and will be ready by 2019. The plant will employ about 500 employees when it opens. Construction is set to begin next year.

“Daimler AG’s decision shows that Poland is an attractive market for foreign investors,” said Mateusz Morawiecki, Deputy Prime Minister of Poland and Minister for Economic Development.

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Daimler CEO Dieter Zetsche said during the Paris Motor Show that partnerships are the future of the auto industry.

“The car industry in Poland is developing into the economy’s innovation hub, creating jobs for highly skilled workers in our country. We place particular emphasis on supporting innovative projects which generate added value for our economy and boost its competitiveness.”

Jawor is the first production site of Mercedes-Benz Cars in Poland. The high-tech factory will produce four-cylinder engines for Mercedes-Benz passenger cars. The plant will be the benchmark for engine production when it opens, Schaefer said.

“Setting up the first plant of Mercedes-Benz Cars in Poland and managing engine production locally is going to be a very interesting and exciting challenge. I am particularly looking forward to working alongside my team of Polish and German colleagues,” said Andreas Schenkel, the head of the new Mercedes-Benz manufacturing subsidiary in Poland.

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Daimler has also invested in other sites central and eastern Europe include a car plant in Hungary and a transmissions factory in Romania. The automaker has declined to comment on the possibility of another car plant in Poland.

Morawiecki also said the Polish government was awaiting the announcement of major investment in its automotive industry by an American company he did not identify. He added the Polish government is also in talks with Toyota on a potential project in Poland.

Daimler has been investing in plants around the world in recent years to expand its manufacturing footprint. Recently, it announced plans to partner with Nissan on a plant in Mexico. Partnerships help offset the level of risk and investment involved in that global growth.

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Nissan is just getting ready to begin production of Infiniti luxury vehicles at a new assembly plant in Aguascalientes, Mexico. They’re based on a platform developed by Daimler’s Mercedes-Benz. And the German maker will begin rolling some of its own models down the line in 2018. All told, the factory will turn out as many as 230,000 luxury vehicles annually by 2030.

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