Mercedes-Benz is set to expand its business into international tourism, thanks to a new alliance with Chinese luxury travel agency HH Travel.
Leaders from both businesses unveiled the new program, Mercedes-Benz Travel, in Shanghai on January 15. The collaboration caters particularly to outbound Chinese tourists (especially to travelers to Europe), and seeks to provide custom-tailored luxury experiences that meet travelers’ increasingly high expectations. Customers will be offered rare and exclusive travel opportunities through Mercedes-Benz’s considerable global connections, said Michael Bock, head of Mercedes-Benz Classic.
Although Mercedes-Benz isn’t the only Western company to encroach upon the Chinese market in recent memory, it is the first automaker to explore the possibilities of the country’s luxury tourism, an already lucrative industry that continues to grow. The German automaker already has an auspicious track record in China, selling 230,000 units in 2013, 11 percent more than the previous year.
This is a smart strategy for the auto company to brand travel in a country where there are few, in any, branded tour operators. Mercedes-Benz is among the first non-tourism brands to leverage its brand in the Chinese travel market.
Moreover, Nicolas Speeks, president and CEO of Beijing Mercedes-Benz Sales Co, considers Mercedes-Benz Travel a means by which the company can maintain and strengthen its influence on its Chinese consumer base.
“We put forward customer orientation in 2013 as one of our most important strategies in China and a fundamental part of this is to understand Chinese customers and provide them with everything they need and value,” Speeks said at the Mercedes-Benz Travel press conference.
HH Travel, a subsidiary of Ctrip, has attained great success in the luxury travel industry since its establishment in 2012. In early 2013, the agency offered a trip around the world in 80 days for 1.18 million yuan ($194,900). It sold out within 15 seconds of becoming available.
HH Travel will primarily be responsible for marketing in the partnership, with Mercedes-Benz taking on the responsibility of designing and manufacturing new products, according to Jack You, CEO of HH Travel.
Ctrip chief operating officer Sun Jie is optimistic about the business collaboration and both companies’ high standards of quality.
“Ctrip has some 110 million clients. Of them, those who book five-star hotels and first-class and business class cabins are the joint program’s target customers. Meanwhile, Mercedes-Benz has rich, unique resources that can enrich our products that other travel agencies probably cannot provide,” Sun said.
Nonetheless, the companies “will not establish a joint venture,” according to China Daily.
Prices for Mercedes-Benz Travel products, which hit the market in late February, have yet to be determined. According to You, “they won’t be cheap of course, but not as expensive as a Mercedes-Benz car.”
image credit: michiel dijcks