Mercedes-Benz is expanding output and retail network in China

Article by Anita Panait, on June 6, 2013

Mercedes-Benz is expanding its capacity and retail network in China as part of its bid to catch up with rivals BMW and Audi. Joachim Schmidt, Mercedes head of sales and marketing, remarked that they recognize China’s strong potential and they have initiated key activities for long-term and sustainable growth in the country.

Mercedes parent Daimler AG expects China to become its largest single market within two years, surpassing the United States and Germany. According to Schmidt, Daimler is aiming to sell over 300,000 Mercedes- and Smart-brand cars in China in 2015, up from less than 200,000 in 2012.

Daimler wants to take advantage of the growing penchant for luxury cars among China’s middle and upper classes. Schmidt told Automotive News Europe that Chinese customers demand “prestigious brands, top products, innovations as well as excellent quality and service."

Daimler plans to significantly increase production at its Beijing joint venture site with Beijing Automotive Group from 96,500 units in 2012 to 200,000 in 2015 – all in line with its strategy to locally produce two-thirds of the vehicles it sells in China. The carmaker will add production of the GLA crossover at the site alongside the C class, the GLK, and the long-wheelbase E class by the end of 2014.

Higher sales in China will boost the carmaker’s bottom line since most of its models sold in the country are high spec. Schmidt noted that Chinese customers typically look for a luxury vehicle with roomy rear area where “the passenger can work comfortably and enjoy high entertainment standards." He added the most vehicles are sold with full equipment since customers also demand interior comfort. [source: automotive news - sub. required]

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