By Norihiko Shirouzu
CHENGDU, China Aug 30 Daimler AG's
Mercedes-Benz expects to see growth of up to 15 percent in
China's luxury car segment this year, a senior executive said,
and is trying to grab a bigger share of that market by expanding
into the inland-west and smaller cities.
The company plans to open 75 new dealer outlets this year,
nearly half in third- and fourth-tier cities, said China sales
head Nicholas Speeks, as part of a broader turnaround plan to
reverse its recent struggles in the world's biggest auto market.
"We are a little bit lagging behind our principal
competitors in terms of outlets opening," Speeks told reporters
at a news briefing to outline the German brand's strategy at the
Chengdu auto show on Friday.
"In the past we have been concentrating on Beijing, Shanghai
(and other major markets along China's coast). We recognize one
of our shortcomings is the fact that we need to expand our
The network expansion is a key component of Daimler's
strategic plan to invest 2 billion euros ($2.67
billion) in China over the next two years.
It aims to boost sales of Mercedes-Benz cars by a third to
more than 300,000 cars a year by 2015, from this year's forecast
sales of 230,000 cars.
If achieved, the target would make China Mercedes-Benz's
biggest market globally. Currently, China is the brand's No. 3
market behind Germany and the United States.
Speeks said China's economy remained "fairly healthy",
despite a slowdown in growth.
China's overall car market was expected to grow about 10
percent, year-on-year, this year, he said. "I think the premium
car market will exceed that. It will be solid double-digit
growth this year."
Asked to define that, he said: "13-15 percent growth -
somewhere in that ball park."
The sale network plan, calls for increasing the number of
Mercedes-Benz dealer retail outlets overall to 300 covering more
than 150 cities by the end of this year, compared with 285 the
brand operates currently.
In addition to Mercedes-Benz stores, the German auto maker
currently has about 90 Smart dealer-shops.
One of the 20 new or upgraded products Mercedes-Benz plans
to launch in China through 2015 is the E-class sedan specially
redesigned for China, which the company is officially launching
at the auto show in Chengdu, southwest China.
On Tuesday, Daimler's new China chief, Hubertus Troska, told
reporters in Beijing about the planned new product blitz and
noted Mercedes-Benz was going to expand its manufacturing
capacity in Beijing, as part of an effort to make its cars more
affordable and expand their appeal in China amid a slowdown in
In order to be the world's No. 1 luxury auto brand by
volume, which is Daimler's objective for Mercedes-Benz, Troska
said the brand needed to improve its performance in China.
"If we are not more successful in China, then our goal of
global position No. 1 will be difficult to achieve," the German
executive said in Beijing on Tuesday.
"There is a recognition that we need to improve our
performance in China vis-à-vis some of our competitors."
One factor behind Mercedes-Benz's struggle in China was a
lack of market coverage.
"If you compare us to our competitors, they cover more
cities. They have more outlets," Troska said. "The expansion of
dealer network and bringing more new products to market are
going to drive our growth momentum."