BMW and Mercedes to cooperate on U.S. vehicle preparation

[cawimmer430]

BMW and Mercedes to cooperate on U.S. vehicle preparation

Diana T. Kurylko
Automotive News
December 11, 2009 - 1:43 pm ET

BMW and Mini have signed a five-year deal to have Mercedes-Benz USA prepare their vehicles coming in for delivery through the port of Baltimore.

The two brands will use the Mercedes-Benz vehicle preparation center to inspect, process and repair all pre-delivered vehicles beginning March 1. Both brands say the agreement makes economic sense.

Jim O'Donnell, president of BMW of North America, told Automotive News today the deal will save BMW time and money. He anticipates about 50,000 cars destined for the central region, which includes Chicago, will be prepared by Mercedes-Benz. He would not disclose financial details.

Currently, BMW vehicles come in through Charleston and are shipped to BMW's factory in South Carolina for pre-delivery work. But because of the expansion of BMW's factory in Spartanburg, S.C., ?the plant is no longer appropriate once the new X3 (crossover) starts to be built? next year, O'Donnell said.

The shipping distance is also shorter from Baltimore. ?Logistically, we will save a reasonable amount of money,? O'Donnell said.

O'Donnell said BMW's purchasing department proposed the deal while searching for an outside contractor.
He said ?there is a possibility? the two brands could have a similar arrangement at other vehicle processing centers if this one works.

Ernst Lieb, CEO of Mercedes-Benz USA, called the deal ?a win-win-situation? in an interview on Thursday.

Lieb said Mercedes-Benz has both the manpower and the space to service BMW vehicles. He said ?there are other opportunities? for cooperation between the two German competitors. Lieb said the two companies are evaluating whether to use a joint shipping company to handle their brands once the cars are processed in Baltimore.

The Baltimore vehicle process center will handle 70,000 Mercedes-Benz and Smart vehicles this year -- about 43 percent of its annual import volume. It has 52 employees and is located on a 92-acre site on the waterfront at the port.

[Colonel Cadillac]

I wonder if Mercedes will not inspect the BMWs as thoroughly...

[TBR]

I wonder if Mercedes will not inspect the BMWs as thoroughly...

I am sure the contract has all the QC processes explicitly detailed.