Mercedes-Benz is a name synonymous with luxury most everywhere around the globe. But sales of the German car have trailed in China. Mercedes is trying to change that. It’s pushing to capture a larger share of the country's giant, and growing, luxury car market.
China is quickly becoming the world’s largest auto market, and has a growing luxury sector, says Michelle Krebs, a senior analyst with Edmunds.com. “Frankly all of the German automakers -- Audi, Mercedes, and BMW -- are relying very heavily on China as a source of sales in the future,” Krebs says.
But Mercedes isn’t where it wants to be. “Mercedes has kind of stumbled and bumbled a little bit in China,” says industry consultant Ken Elias of Maryann Keller & Associates. He says Audi has outpaced Mercedes in setting up a dealer network and gaining popularity with wealthy Chinese.
“Mercedes has fallen behind Audi and BMW in the luxury market globally and they want to retake that top spot,” Elias adds.
Krebs says building Mercedes engines in China is a good way to build business there. "Otherwise they'd have to import from Germany, which is a very expensive market to build vehicles in, she says. Building in China will save on shipping costs and import duties, freeing up Mercedes to focus on expanding its share of the Chinese car market.