Mercedes-Benz Adding Russian Suppliers for New Plant

Moscovia plant looking to get up and running.

by on Nov.13, 2017

Daimler and Russian officials show off the model for the new Mercedes-Benz plant just outside Moscow.

With the company’s plans to expand production in Russia now rolling forward, Mercedes-Benz is looking for more Russian-based suppliers as it moves to expand its industrial base inside the country.

“We will produce our best sellers for the regional market at the new Mercedes-Benz Moscovia plant on a fully flexible basis. To do so, we count on local partners that provide us with top quality and innovations,” noted Klaus Zehender, member of the Divisional Board of Mercedes-Benz Cars.

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“Thus we are following our general localization strategy to buy materials, where our production operations are based,” Zehender said during a supplier event Mercedes-Benz hosted in Moscow last week.

Mercedes-Benz held a special forum in Moscow last week to recruit potential supplier. The Ministry of Industry and Trade provided a list of suppliers in Russia to Daimler to support the supplier search for the local production.

(Click Here for details about Daimler’s new plant in Russia.)

In addition to more than 100 Russian suppliers, local representatives from politics and business as well as Mercedes-Benz delegates from purchasing, quality and production departments also participated.

Zehender also noted that the Russian suppliers Mercedes-Benz recruits could be given the opportunity to export their components from Russia to other Mercedes-Benz plants around the world, underscoring the importance Daimler puts on local suppliers.

“We continue to rely on a close cooperation with our Russian partners. The rapid construction progress already indicates the dimension of the new plant. The supplier forum is part of our strategic commitment to the Russian market,” said Axel Bense, CEO of the Mercedes-Benz Manufacturing RUS production company.

Global automakers have eyed the Russian market with great interest for more than a decade. But the market collapsed after the 2008 financial crisis. Sanctions stemming from the political upheaval in the Ukraine, the collapse of oil prices on which the Russia depends and the slow growth the economy – and new-car sales – prompted General Motors to pull out of the country more than two years ago.

(Nissan running with the bulls in Russia. For the story, Click Here.)

Other carmakers such Renault, Ford and Mercedes-Benz, however, have elected to stay in and even GM appears to have second thoughts.

The ground-breaking ceremony for the new Mercedes-Benz passenger car plant was held this past June and the first vehicles are planned to roll off the line in 2019.

The infrastructure in the surrounding area also continues to develops with the support of the local and Russian federal government authorities based on a mutually trustful cooperation.

Mercedes-Benz has been present in Russia since 2010 with production operations for vans and trucks and thus already has an existing supplier network. The shell of the new passenger car plant can is now visible in the Esipovo Industrial Park, less than 20 miles from Moscow.

(To see more about expanding auto investments in Russia, Click Here.)

Production will initially start with the E-Class saloon, gradually followed by the SUV models GLE, GLC and GLS. Overall, Daimler AG is locally investing more than 250 million euros. All production steps from body shop and paint shop to final assembly will be performed at the plant.

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