The smaller Mercedes-Benz B Class is expected to be a big seller in China
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. – read more at ChinaDaily.com…
A Volkswagen China ad for the new Beetle. The company is considering a new Guangdong plant to meet demand in South China.
More than 4 billion euros (US$5.5 billion) will be invested in the new facility, due to be completed in 2013, which will make models under Volkswagen, Audi and Skoda brands, The Beijing Times said, citing Winfried Vahland, president of Volkswagen China Group.
Two factories with output capacity of 200,000 units each will be set up by VW’s domestic ventures, the report added.
Since VW entered the Chinese market in 1984, it has performed sluggishly in south China, where Japanese rivals, including Toyota, Nissan and Honda, are dominant.
Last year, VW announced plans to boost sales and raise market share in south China, including the Guangxi Zhuang Autonomous Region and provinces of Hainan, Zhejiang, Jiangxi and Fujian. – read more at ShanghaiDaily.com…
Audi's Q7 on display at the Shanghai International Auto Show in April.
The projection underscores a broader geographic shift among auto makers toward Asian growth markets.
“Today we’re at 118,000 car sales already. We’re on track to significantly surpass our initial target in China this year” of selling 130,000 cars, said Peter Schwarzenbauer, Audi’s executive board member responsible for sales and marketing, in an interview.
He said the Ingolstadt-based company will launch its A3 hatchback in China next year as part of a wider move to attract a broader customer base there, in addition to the new Q5 small sport-utility vehicle, which is being rolled out globally.
Audi ranks third in global luxury- car sales behind BMW AG and Daimler AG’s Mercedes-Benz. But it keeps a firm grip on the top position in China, which it gained thanks partly to the early market entry of its parent company, Volkswagen AG.
Mr. Schwarzenbauer said annual sales in China might soar to 250,000 cars by 2012 or 2013 as Audi is preparing to launch several new or revamped models, ramping up local production and expanding its dealership network.
He said Audi also plans to establish a broader leasing and financing business in China to tap rising customer demand. Most Chinese buyers tend to pay cash for their vehicles. read more at online.wsj.com…
