Mercedes-Benz wants U.S. public dealership groups to enter China

Article by Christian Andrei, on April 30, 2012

It appears that Mercedes-Benz wants to take its expansion in China to another level as the German manufacturer wants U.S. public dealership groups to enter China. These words came from Joachim Schmidt, Mercedes-Benz's global sales chief who said that he would appreciate it if dealers would consider to take the plunge and enter China.

Mercedes-Benz is currently adding a new dealership about every week and so far it has 214. All are independently owned and operated. If in Germany Mercedes-Benz owns several dealerships, it won’t do that in China, as according to Schmidt is too strange and it is quite complicated.

As a result, Mercedes-Benz decided not to became a dealer. Many of the Mercedes-Benz dealerships located in China are owned by joint ventures between large old-line international trading groups such as Hong Kong-based Jardines and the local Chinese businessmen. In the United States, Mercedes-Benz has strong ties with AutoNation and Penske, the two largest U.S. dealerships groups, but it appears that these are not interested in entering the Chinese market.

According to Roger Penske, CEO of Penske Automotive, it appears that the company studied China as a potential next market but haven't found the scale. Moreover, Penske added that Mercedes-Benz is a great brand to go to China, but for the moment his company have not found it would meet their capital.

Regarding AutoNation, Ceo Mike Jackson won't even open the door that far as he considers it “another level of complexity and risk”. Joachim Schmidt, Mercedes-Benz's global sales chief added that the Chinese groups are not very experienced in the car business and the German manufacturer does a lot of efforts into training these dealerships and as expected they are spending a lot of money on it.

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