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.