Mercedes-Benz, together with local partner Thonburi Automotive Assembly Plant (TAAP), will invest over 100 million euros (RM483 million) in production operations in Thailand until 2020. The investment will go into the extension of an existing car plant in Samut Prakan and a new hybrid battery assembly plant in the area. The investment will create over 300 additional jobs.

The 48,000 square metre hybrid battery factory will be the first of its kind in Thailand and the sixth facility for Daimler across the globe. There are three of such battery plants in Germany and one each in the US and China. It will also be the first hybrid battery production site in ASEAN.

“The electric initiative in the flexible and efficient global production network of Mercedes-Benz Cars is progressing well and with ultimate speed. As part of our strategy, we are now preparing for the future of electromobility in Thailand together with our partner TAAP,” said Markus Schafer, member of the divisional board of management, Mercedes-Benz Cars production and supply chain.

“With our highly standardised and scalable battery production concept we are able to start operations in any region at short notice and at the right size,” he added.

Local production of the lithium-ion batteries will start by 2019. “All locally-assembled batteries will serve Mercedes-Benz’s PHEVs in the local market and we can beef up our capacity once local demand expands,” said Andreas Lettner, CEO of Mercedes-Benz Manufacturing Thailand.

TAAP, which started assembling Mercedes-Benz since the W123, currently rolls out the C, E, S, GLE, GLA, CLA, GLC, GLC Coupe and C-Class Coupe models; and part of the investment will result in a “substantial increase in the production portfolio, adding new models.”

Last year, the premium brand achieved double-digit growth and its highest ever sales in Thailand, with 14,484 units sold. Thai-assembled PHEVs – the C 350e, E 350e, S 500e and GLE 500e SUV – accounted for 40% of total sales.

In January, president and CEO of Mercedes-Benz Thailand Michael Grewe announced that the company had applied for Thailand Board of Investment (BoI) privileges for both PHEV and full EV categories. Fellow German premium brand BMW, which also assembles and sells PHEVs in Thailand, has similar plans to localise hybrid battery production. BMW’s battery plant is also scheduled to come online next year.

Thailand has of late put in efforts to attract carmakers to build green cars such as hybrids, PHEVs and EVs in the country. Last year, the BoI approved promotional privileges for carmakers. Market leader Toyota was the first to apply for and receive the BoI privileges under the hybrid category, and it will be the first to roll out a new model under the scheme with the Toyota C-HR Hybrid this month.