Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Europe By The Numbers
  • Car Cutaways
  • Resource Center
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
    • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • SENSEAUTO: Driving the future of mobility with SenseAuto: The AGI power behind the wheel
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
January 13, 2015 12:00 AM

Mercedes increases emphasis on China in bid to pass BMW, Audi

  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Daimler has spent 112 million euros on its Beijing r&d center, where 500 engineers and designers will be working to make sure locally made models cater to customer demands in China.

    Mercedes-Benz could become the first luxury carmaker to launch new models in China before rolling them out in Europe and the U.S. after strengthening its local r&d operations in a bid to narrow the gap with Audi and BMW in the world’s largest car market. Measured by global car sales, Mercedes is the smallest of the three dominant German premium brands largely because of its weaker position in China, where it had suffered in the past from having two competing sales organizations, a much thinner dealer network and a lack of locally built compact SUVs.

    ‘Massive investment’

    Introducing future models in China first would highlight how much priorities have changed for Daimler over the past two years, when it was forced to overhaul its stagnating business there in late 2012 after witnessing its two German competitors divide up market gains for themselves. “In the past China wasn’t part of the first roll out phase [for new products], which is perhaps a reason why we were a little bit behind,” Mercedes development chief Thomas Weber told Automotive News Europe during the opening of its new advanced design studio in the Wang Jing district of Beijing. “Why not be first at some point? That’s the trend in my view and it could not happen without a massive investment in r&d,” he said.

    Over the last couple of years, Daimler has appointed a new board-level executive responsible solely for China, unified local sales and distribution, constructed a car engine plant (its first one outside of Germany), added 179 new dealerships and bought a 12 percent stake in joint venture partner BAIC Motor for 627 million euros.

    Mercedes will begin building the GLA compact SUV early this year in addition to its midsize GLK crossover and long wheelbase versions of the E- and C-class sedans. More compact cars will roll off the assembly line at its joint venture plant in Beijing following a 1 billion euro investment by Daimler and BAIC. Ultimately Mercedes aims to sell significantly more than 300,000 cars in China in 2015, two-thirds of which it hopes to build locally.

    Rising local content

    Weber wouldn’t say which major model Daimler might first debut in China, emphasizing that deliberations are at a very early stage. Such a move would require a high level of local content, a larger pool of qualified suppliers in China and more testing facilities, which is where his team comes in. “At the moment no one is doing it. I explicitly will not rule out launching new models and derivatives first in what will soon be the most important market, but in order to do so, a few conditions have to be met.”

    Its recent decision to invest 112 million euros to expand its Beijing research facilities is closely linked to these plans, since it needs the necessary proving grounds, test benches and vetted suppliers in place to guarantee a smooth launch. This includes two r&d departments based at its factory in Yi Zhuang on the outskirts of Beijing that together adapt vehicles and engines to Chinese needs, ensure quality, and establish ties to local suppliers -- all crucial when launching new models. Mercedes, which has over 280 suppliers based in China, aims to increase local content to about 80 percent to 90 percent from the current 60 percent to 70 percent.

    AUTOMOTIVE NEWS EUROPE E-MAGAZINE

    This story is from the current issue of the Automotive News Europe monthly e-magazine, which is also available to read on our iPhone and iPad apps.You can download the new issue as well as past issues by clicking here.

    Trend trackers

    The new r&d center also has other tasks beyond the design studio, such as forecasting the latest in social trends. For instance, while oversized cupholders are a must in the U.S., having space for tissue boxes is crucial in China. Equally important is monitoring developments in legislation and regulations, from subsidies for new energy vehicles to discussions over specific emissions targets for individual car models. “From now on,” Weber said, “China plays a major role for our global product development process.”

    RECOMMENDED FOR YOU
    EU trade chief to tell China that retaliation is a bad idea
    Recommended for You
    EU trade chief to tell China that retaliation is a bad idea
    EU trade chief to tell China that retaliation is a bad idea
    Joerg Lamparter Mercedes 2023 Eurostar
    2023 Eurostar winner Joerg Lamparter of Mercedes-Benz
    Mark Zhou Nio 2023 Eurostar
    2023 Eurostar winner Mark Zhou of Nio
    Dr. Kai Yu, Founder and CEO of Horizon Robotics
    Sponsored Content: Interview with Dr. Yu Kai, Founder and CEO of Horizon Robotics
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Europe By The Numbers
    • Car Cutaways
    • Resource Center
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
        • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
        • SENSEAUTO: Driving the future of mobility with SenseAuto: The AGI power behind the wheel
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us