Mercedes-Benz, owned by Daimler, has a steep goal: it wants to reclaim the title of world’s largest automaker by 2020, says Seeking Alpha. To do this, it will need to revitalize its presence in the Chinese market, where German rivals BMW and Audi have bested it. Now, Mercedes-Benz plans to raise the local production of its vehicles in China, avoiding a 25 percent excise tax. By 2015, the company says, it will produce 2/3 of its vehicles for the Chinese market in China.
This year has been a challenge for Mercedes: while Audi sales rose 18 percent and BMW sales rose 15 percent, Mercedes sales saw no growth. That may change, however, in the second half of this year, when its high-volume A-class, an entry-level luxury car, arrives in China. The A-class is expected to encourage middle class members to purchase their first luxury car without the fear of overstretching their budgets.
By 2015, Mercedes-Benz hopes to introduce 20 new or “refreshed” models to China, and this goal will be assisted when local production ramps up. It will also allow the design of the cars to be influenced by local preferences. Beginning now, Mercedes-Benz will add 50-75 new dealerships in China, which will allow their cars exposure in interior markets where Audi and BMW have covered the market.
A McKinsey & Co. report from earlier this year projects that China’s luxury car market will account for 2.25 million cars by 2016 and 3 million by 2020, making it the world’s largest and most vital luxury car market, and essential to Mercedez-Benz’s goal of returning to number one automaker globally.
image credit: mercedes-benz china