Mercedes-Benz losing ground in China

Mercedes-Benz has lost ground in China with Audi and BMW steaming ahead. Believe it or not, driving a Mercedes-Benz is not considered so prestigious in countries such as China. Mercedes-Benz opened their first factory in China in the year 2006.

From there onwards the company took a great stake in the luxury car market, gaining a 22 per cent share. The company would seemingly give anything to reach those heights once again after fading away over the past couple of years. Although that figure has dipped 1 per cent compared to today’s market share, Mercedes-Benz have failed to capitalise on their initial growth. Audi are the number one luxury car manufacturer having 32 per cent of the market share with BMW having 23 per cent.

Audi’s market is so large that China is the company’s number one market. The Mercedes-Benz E-Class saw it’s sales dip by 23 per cent to just 16,111 between January and May of this year, a very poor result for the company indeed. The mid-size luxury car segment is one of the most competitive areas of the market with Mercedes-Benz not having enough to succeed. There is a stark contrast with Audi and BMW sales in the mid-size segment.

The Audi A6L saw sales climb by 44 per cent reaching figures of 58,127. The BMW 5 Series sold 39,973 meaning sales increased by 44 per cent too. However Mercedes-Benz has taken the news with a pinch of salt. They believe that their performance will improve throughout the year. How do they plan on catching up with their great German rivals? They are revamping their Chinese factories in order to make way for the production of new models. The limited edition Mercedes-Benz B-Class is expected to make a great impact in China too.

In effect Mercedes-Benz will “phase out” some of their current models. Some experts believe that the fact that Mercedes-Benz started later than rivals in China means that they have effectively had to play catch up, giving reason to their poor performances. Mercedes-Benz started producing cars in China 16 years after Audi and two years after BMW. Mercedes-Benz will double their annual production capacity by 2015, according to the company themselves. This will in effect allow them to produce 200,000 models per year. Rivals BMW will up their production levels to 400,000 by the same year with Audi planning to produce 700,000. Will Mercedes-Benz always be playing catch-up in China?

 

Leave a Reply