Weakening market? Far from it! The new Mercedes-Benz V-Class continues to forge ahead in China. In a country that is developing into a discerning, luxury-oriented market, this project has a significant growth potential. But it could hardly be accomplished without finely-tuned logistics.

What appears to be just a few flicks of the wrist nevertheless carries tremendous symbolic weight. For everyone knows: a Mercedes-Benz stands for “the best or nothing.” Wei Jianyou reaches into the box by his side, removes the padded plastic packaging and screws the three-pointed star into the circular hole in the radiator grill – done! Here at the Fujian Benz Automotive plant in Fuzhou the Mercedes-Benz star is being fitted into the new V-Class. This straightforward operation is followed by a final quality check and then the luxurious multi-­purpose vehicle (MPV) rolls off the assembly line and into one of the many dealerships dotted around China.
A vast amount of preparation goes into ensuring that the Chinese V-Class is just as entitled to bear the iconic star as vehicles of the same type produced in the company’s global competence center for mid-size vehicles in the Spanish city of Vitoria. After all, each of these vehicles is made of more than 10,000 individual parts: screws, rims, springs, buttons, rivets, gaskets, cables, pistons, metal sheets. Some of these parts are pre-assembled before being delivered. These components include the engine, gearbox, axles but also the steering column, air conditioning unit, dashboard or center console. Irrespective of where it was manufactured, the automobile that ultimately rolls off the assembly line has to be a real Mercedes-Benz. This is guaranteed by the globally standardized Mercedes-Benz Production System, which is also in place in Fuzhou.

lead plant midsize vans and hub for parts: vitoria, spain

However, there is far more to it than just that: all of the individual parts need to meet Mercedes-Benz’ exacting standards – and they must be in the right place at the right time. That poses a challenge for the logistics experts. After all, the parts that make a V-Class a true Mercedes-Benz are not readily available here in Fuzhou, around one hour’s flight south of Shanghai. They cannot be purchased here, and not all of them can be manufactured on site in the plant.

The Chinese upper and upper-middle class appreciate a sophisticated lifestyle. “In China we see far more people being chauffeur-driven than in the United States or in Europe,” Krupinski explains. That is particularly true for business people, who are often joined on trips by ­customers, partners or staff, in which case a classic limousine is simply too small. In their private lives, many Chinese not only travel with their wife and children but also take along parents and possibly even the children’s nanny. And when they do, they want a vehicle that befits their social status. Hence a Mercedes-Benz, and hence the V-Class.

“Fujian Benz has adapted the V-Class for the Chinese market and made it even more luxurious,” says ­Krupinski. As a result, the vehicle has features one would normally expect to find in an S-Class. This includes a large center console with refrigerator box and thermo-cup holders and special luxury comfort seats in the rear – ideal for business people who want to work during the ride or enjoy the seat’s indulgent massage function.

Van Segment with very Good growth prospects in China  

“The V-Class has an enormous potential in China, as do both of our other Fujian Benz products, the Sprinter and the new Vito, which also have good growth prospects,” says Krupinski. Logistics experts like Shwa Zhang are already busy preparing for that particular scenario and planning the required capacities. “During ramp-up phases in production, we rely more often on airfreight ­imports.”
Fujian Benz also depends on air cargo consignments when it comes to exports. Prior to the launch of serial pro­duction, for example, pre-production cars are transported to the Stuttgart headquarters of Mercedes-Benz Vans, where the design engineers put the automobiles through their paces on the test benches. On request, components from China are flown to plants in Europe or the US. The luxury version of the center console, for instance, was purpose-developed for the Chinese market.
Regardless of whether it is to or from the Far East, the services provided by the logistics experts must always be in line with Mercedes-Benz’ high standards. “When we opt for an airfreight solution, then there is only one maxim: it has to work,” says Zhang, the logistics manager. “Ideally, we like to keep logistics costs as low as possible, but at the end of the day the ultimate objective is to ensure a reliable provision of supplies to our production.”

The company Fujian Benz Automotive is a joint venture run by Daimler together with its Chinese partners. The company operates an automotive plant in Fuzhou, a city of two million people in China’s mainland Fujian province across from the island of Taiwan. Founded in 2007, the company now employs a staff of more than 1,400; 200 employees work in logistics and 500 in man­agement, administration and service.
The lineup The plant in Fuzhou produces the Mercedes-Benz ­models V-Class, Vito and Sprinter, which are mainly used as luxurious MPVs, people carriers, ambulances and emergency police vehicles.
The production As in all traditional automotive plants, production in Fuzhou is split into the body shop, the paint shop and the final assembly. Fuzhou is also Mercedes-Benz’ first van research and development center outside of ­Germany.  
The logistics Around 40 percent of the parts required on site are manufactured in China; 60 percent are either produced in the Spanish city of Vitoria, the company’s global lead plant for the production of all Mercedes-Benz midsize vans, or consolidated there and then consigned to Fuzhou. In 2015, 819 containers were transported from Vitoria to Fuzhou as ocean freight. On the airfreight side, the company accumulated a total of 1,314 AWBs.

Shwa Zhang, Senior Manager Logistics Warehouse Supply at Fujian Benz.