Valmet to Build Mercedes A-Class

VIENNA – Finnish contract manufacturer Valmet Automotive will produce the new Mercedes-Benz A-Class at its plant in Uusikaupunki starting in 2013.

More than 100,000 A-Class vehicles are slated to be built by Valmet between 2013 and 2016.

In addition to Daimler’s Rastatt, Germany, and Kecskemét, Hungary, facilities, Valmet’s Uusikaupunki operation will be the third European plant to produce cars based on Mercedes’ MFA front-wheel-drive architecture.

“Our new compacts are so popular with our customers that the Rastatt and Kecskemét plants are completely utilized,” Wolfgang Bernhard, Daimler’s management board member responsible for manufacturing and procurement-Mercedes-Benz Cars & Vans, says in a prepared statement, noting Rastatt will move to a 3-shift operation this fall.

“We thus signed Valmet as an experienced production specialist who will provide us with additional A-Class capacities as of 2013.”

Valmet President Ilpo Korhonen says his company’s ability to launch production quickly played a key role in landing the deal with Daimler.

Based on current plans, the A-Class program will allow Valmet to call back workers on temporary layoff next year (on average some 300-400 employees in 2012) and potentially hire hundreds of new workers in 2014 and beyond, depending on actual A-Class volume.

The contract with Daimler is extremely important to Valmet, which has been looking to fill capacity left idle by the expiration of a build contract with Porsche last year. Valmet manufactured 227,890 Porsche Boxster and Cayman sports cars between September 1997 and May 2011.

After the production of the last Finnish-made Porsche in May 2011, the company continued shipments of Cayman pretreated bodies and Boxster body panels to Porsche until the end of the year.

Valmet currently manufactures the Fisker Karma sports sedan. It plans to add assembly of Russia’s Marussia B2 sports car in late 2012 or in 2013. However, both are small-volume contracts. The company also produces Garia luxury electric golf carts.

Daimler launched volume production of the next-generation A-Class at its plant in Rastatt earlier this month.

The auto maker says it has received more than 40,000 A-Class orders to date. Market launch will be in mid-September.

The B-Class, also based on the MFA platform, is produced in Rastatt and in Kecskemét. Additional spin-offs of the new-generation compact cars are planned, including a compact cross/utility to be manufactured in Rastatt and CLA 4-door coupe to be made in Kecskemét.

Originally, Daimler invested €1.4 billion ($1.7 billion) in production of the new generation of MFA cars, including €800 million ($970 million) for construction of the Kecskemét facility and €600 million ($725 million) for expansion of the Rastatt plant.

A further €600 million will follow this year and in 2013 for a second wave of the Rastatt expansion. These new investments are slated for modifications of the assembly line and corresponding equipment installations in the body shop.

Another €400 million ($483 million) will be invested in the powertrain plants this and next year for production of components used solely in the new compact models.

There is no information about the investment needed to retool Valmet’s plant for the A-Class.