Daimler wants to end rebates on Mercedes-Benz units in China

Article by Anita Panait, on December 15, 2013

Daimler is working on terminating rebates on its Mercedes-Benz vehicles in China while trying to match the growth of its rivals in the luxury segment in 2014. Hubertus Troska, head of Daimler's operations in China, remarked that they are not aiming for volume at any price. "We're first tackling the positioning of the E and C class," he said, adding that the success of Mercedes-Benz in China "doesn't depend on the sales volume of 2014."

Daimler named Troska a year ago to fix its Chinese business, which was hindered by separate distribution structures for locally produced and imported Mercedes cars. Daimler has already merged the two sales operations and has strengthened its relationship with partner Beijing Automotive Group Co. by acquiring a 12 percent stake in the latter's BAIC Motor carmaking unit.

An improvement in its operations in China is crucial for the goal of Daimler chief executive Dieter Zetsche goal to exceed BMW Group and Audi in global sales of luxury vehicles by the end of the decade. Troska expects the Chinese car market, particularly the luxury segment, to gain over 10 percent in 2014, adding that they "want to grab our share of that."

Mercedes' sales in China this year are recovering following a 47-percent drop in February 2013. Its deliveries in the first 11 months of 2013 in China surged 10 percent to 194,500 -- which is still far behind BMW's 328,800 vehicles (20-percent gain), and Audi's 443,700 units (20 percent).

Mercedes managed to recover later in the year thanks to a revamped E class and a new version of the flagship S class. Troska reiterated a target to hike annual deliveries in China to 300,000 by 2015, with locally built vehicles accounting for two-thirds of the number.

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