Top Biz News
Mercedes' domestic sales to outdo UK
By Li Fangfang (China Daily)
Updated: 2010-03-18 10:13
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BEIJING - Mercedes-Benz believes its strong market success in China comes from the German carmaker's ability to assimilate the trends and demands of the local market.
That strategy has been key to zipping ahead in China's fiercely competitive and dynamic automobile market, according to Klaus Maier, president and CEO of Mercedes-Benz (China) Ltd.
Just last month, his company posted record year-on-year growth of 160 percent in China, far outpacing Audi's 62 percent growth and BMW's 97 percent.
Maier credits the company's success in China to a comprehensive understanding of the market.
By all accounts, the strategy has served the Stuttgart-based company well. In the first two months of 2010 alone, for instance, it enjoyed vehicle sales of more than 15,300 units.
This translates, on average, to approximately 7,500 units per month thus far in 2010 - compared with the company's typical delivery of 5,500 in 2009.
Mercedes executives see this as a long-term trend on the mainland. "Our successful efforts in formulating such a localized strategy have provided us with increasing and validated confidence looking forward, as we expect to continue growing at a higher rate than our competitors, as well as the overall and luxury auto market in 2010," said Maier.
This is expected to have global implications for product sales. This year, added Maier, "we expect China to overtake the UK to become our third largest market worldwide".
Knowledge of the Chinese marketplace, in terms of economics and demographics, and adapting sales and marketing activities to the fast changing environment has made Mercedes the top brand among China's growing numbers of wealthy people.
Mercedes-Benz, for example, has long been straddled with a "Big Benz" reputation - an automaker dedicated to bigger, more traditional luxury cars.
Following studies of the Chinese market, however, "we have made a point to diversify our product portfolio - even introducing China-specific models - to reflect market demand", said Maier. "Supported by enhanced marketing activities the Mercedes brand has broadened its image, and is more identifiable to a much wider customer base."
Quick to realize the trend for entry-level models with smaller engine sizes, the German-luxury brand launched a wide range of products with 3.0 liter or less-sized engines last year, including its B-Class and smart car.
"The reason for this, in part, lies in the recognition of our younger audience with an average age below 40-years-old, which has the majority of purchasing power in the country," said Maier.
Mercedes' German rival BMW has also realized that its customers in China are younger and more discerning. Introducing smaller and more diversified vehicles appeals to a younger, lifestyle-oriented audience.
BMW launched its 1-series hatchback in China in 2008, and launched its smallest SUV, the X1, this January.
Catering to China's growing interest in a greener society, two hybrid models were also included in the luxury carmaker's local product launch this year.
Mercedes-Benz has also taken at first-hand look at the environmental damage accompanying China's breakneck industrialization.
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"Mercedes Benz has carefully crafted it's formula for success in a business environment that can prove challenging to all carmakers," said Bjoern Hauber, vice-president of sales and marketing of Mercedes-Benz (China) Ltd. "Later this year, we will continue to expand our product portfolio, and introduce even more eco-friendly products to lead the market trend."
Additionally, Mercedes SLS AMG - an alluring sports car characterized by its dynamic performance, purist design, lightweight construction and outstanding handling - is scheduled to enter China in 2010.
