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  • Wednesday, September 17, 2014
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Weak performance prompts Mercedes-Benz to rethink China strategy

  • Staff Reporter
  • 2013-01-27
  • 12:40 (GMT+8)
Mercedes-Benz at a Beijing car show. (Photo/Xinhua)

Mercedes-Benz at a Beijing car show. (Photo/Xinhua)

Mercedes-Benz is facing challenges as it saw lower than expected sales in China last year and reports weaker performance than competitors. Three senior executives at the company have been moved or have resigned as the company rethinks its strategy in the giant market, the state-owned China News Net reports.

Dieter Zetsche, chairman of Daimler AG and head of its subsidiary Mercedes-Benz, said that in competition with Audi and BMW, it could take the lead by 2020, but was unlikely to show signs of a turnaround this year. "On the other hand, if we still lag far behind our rivals in 2019, we are unlikely to stand in the front rank by 2020," Zetsche said at a recent industry fair in Detroit.

Some media reports have said the company has held talks with the state-owned Beijing Automotive Industry Holding Co (BAIC), a holding company for several of the nation's carmakers. This would help further the integration of Mercedes-Benz's sales channels in the country and entail a significant management reshuffle. It is also expected to participate in BAIC's IPO plan through acquiring a 10-20% stake in the company.

In addition, Daimler and BAIC have set up a joint venture to manage sales. The former's German headquarters will name someone to sit on the new organization's board of directors.

Before 2015 Mercedes-Benz plans roll out 20 new and remodeled lines and expand its network of dealers across the country, growing the number of cities it has a presence in from roughly 100 to 200. It hopes to sell 300,000 units annually by 2015, 70% of which will be produced in locally.

Klaus Maier, former president of Mercedes-Benz China, and Bjorn Hauber, executive vice president of sales and marketing, were moved back to Germany late last year, Cai Gongming, vice president of sales also recently announced his resignation. Weak sales in China last year are believed to be the catalyst for the departure of the senior executives.

Figures show that the firm sold 1.32 million cars in 2012, including 196,211 in China, which represented only a 1.5% annual growth. In comparison, Audi sold 405,800 cars in the country last year, a nearly 30% year-on-year growth. BMW sold 326,400 vehicles - a more than 40% increase from a year earlier.

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