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Mercedes plans new engine plant in Poland, deepens supply chain in eastern Europe

04 May 2016 | Rachael Hogg

RollingBanner_MercedesBenzDaimler has announced it is planning to invest around €500m ($574m) in a new engine plant in Poland, expanding its powertrain footprint and its presence in eastern Europe.

The new plant decision followed an earlier announcement that the carmaker would invest a further €560m to expand its plant in Kecskemét, Hungary to build a new generation of compact cars by 2018.

The engine plant, which will be the first Mercedes-Benz plant in Poland, is set to be built in Jawor, around 70km west of Wroclaw, and will produce four-cylinder petrol and diesel engines for passenger cars. The proposed plant will only be the second Daimler facility – and the first fully owned entity – producing engines for Mercedes-Benz passenger cars outside of Germany, following the opening of an engine plant in China last year.

Frank Deiß, head of production powertrain for Mercedes-Benz Cars and site manager of Merc’s Untertürkheim plant in south-west Germany, said the new site in Poland would allow the OEM to react flexibly to market changes across several plants. The OEM’s powertrain production compound is currently managed by the lead plant in Untertürkheim, which in addition to engines produces transmissions, axles and related components and also serves as a centre of competence for the ramp-up of new products, technology and quality assurance.

“The planned establishment of a new engine plant in Poland is a further step in our global growth strategy,” added Markus Schäfer, member of the divisional board for production and supply chain management at Mercedes-Benz Cars. “Capacity expansion in eastern Europe reflects the increasingly international orientation of our powertrain production compound. This will lead to more flexibility and efficiency in our worldwide production network.”

Production at the new Daimler site is planned to start in 2019. The final location and implementation of the site will depend on various commitments regarding investment conditions, however, as well as the granting of state aid to invest in Jawor.

The Polish plant will be part of an increasingly international supply chain for Mercedes-Benz’s powertrain production. The Beijing Benz Automotive Corporation (BBAC) plant, a joint venture, manufactures front- and rear-wheel drive vehicles along with engines for local demands, and produces the GLA. Daimler subsidiary Star Transmission, meanwhile, assembles transmissions and produces parts and components in Romania; while the Nissan plant in Decherd, Tennessee manufactures four-cylinder petrol engines for Mercedes-Benz under a strategic cooperation between Daimler and the Renault-Nissan Alliance.

Mercedes-Benz still maintains the bulk of its engine and powertrain production and supply chain in Germany, however. According to Automotive News Europe’s Guide to Powertrains, this includes six-cylinder diesel engines in Berlin; four-cylinder petrol and diesel units at Kölleda; twelve-cylinder petrol engines for AMG variants in Mannheim; eight- and twelve-cylinder petrol units at Affalterbach; and four-, six- and eight-cylinder petrol engines as well as four-cylinder diesels at Untertürkheim.

The investment in Hungary, meanwhile, will add more production to Mercedes-Benz existing compact production in eastern Europe, further localising the supply chain and improving in-plant logistics. According to Daimler, around €250m will be spent on a new 99,000 sq.m body shop, while the press shop will also be expanded.

Moreover, the production line will see further automation. In the final assembly section for the new compact vehicles, for example, materials will now be brought to the assembly line in pre-picked baskets of goods via driverless transport vehicles directly from the logistics and picking zones. According to Daimler, not only does this eliminate the need for workers to handle the materials themselves, but it also helps them  determine if all components have been sorted correctly since a look into the baskets at the end is all that’s needed.

 

 

Tagged with: Engines, Europe, In-plant Logistics, Inbound, OEMs, Poland, Production