Daimler AG will invest more than 300 million euros ($390.6 million) to build a factory in Romania to assemble transmissions for its Mercedes-Benz brand after reaching full capacity at its main powertrain plant near Stuttgart.
Daimler plans 300 million euro expansion in Romania
Transmission output to start in mid-2013
Daimler will begin assembling five-speed automatic transmissions in mid-2013 at a new plant in Sebes, which is close to an existing parts factory in Cugir, the Stuttgart-based company said in a statement today.
The new site will start production of dual-clutch transmissions in 2014 and add capacity for the automaker's next generation of drivetrains in 2016, the company said.
Daimler, which has been producing parts for engines and transmissions in Romania at a joint venture since 2001, is adding capacity across eastern Europe as the Mercedes-Benz brand expands its lineup of compact cars.
Daimler opened an 800-million-euro car factory last year in Kecskemet, Hungary, where it makes the Mercedes B-class and CLA compacts.
CEO Dieter Zetsche has vowed to regain the top spot in global luxury-vehicle sales by the end of the decade and plans to boost the operating margin at the carmaking unit to 10 percent of sales.
First-quarter earnings before interest and taxes at the Mercedes-Benz Cars division, which includes the Smart minicar brand, dropped 63 percent to 460 million euros, resulting in a 3.3 percent margin, the company said today.
Further development of the Sebes plant is subject to backing from the Romanian government, Daimler said.
The carmaker isn't able to expand transmission production at its plant near Stuttgart because of space limitations, it said.
Bloomberg & Reuters contributed to this report