For Daimler, Things Went “better Than Expected” In China

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

Daimler is banking on further growth in China. The country continues to develop positively, said Daimler China boss Hubertus Troska.

The optimism of the automaker Daimler for the Chinese market is unbroken. "It went even better than expected," said Daimler's China board member Hubertus Troska to journalists on Monday evening with a view to the past year. He is confident that there will also be growth prospects in 2017. "The fact is that China continues to develop positively."

Daimler increased its sales in the country this year from January to the end of November by 27.9 percent to 429,325 vehicles. This means that the Stuttgart-based company is getting closer and closer to its arch-rival BMW. The Bavarians had sold 423,330 cars in China within a year by October.

The entire Chinese market had grown by 15 percent by the end of October - figures for November are not yet available. But nobody dares to dream of these growth rates every year, says Troska. The Association of the Automotive Industry (VDA) is only expecting an increase of five percent to 24.2 million cars in 2017.

Localize production in China

The tax breaks for particularly small engines, with the help of which the Chinese government stimulated the dip in growth in the car market last year, will expire at the end of 2016. The VDA recently said it is still unclear whether there will be an extension of this tax incentive. However, Daimler did not particularly benefit from this anyway, Troska said.

However, according to Troska, the monetary incentives for electric cars should also be reduced in the coming years. Nevertheless, Daimler wants to expand the range of models produced locally: "The strategy is to localize in China, this also applies to electric vehicles," said Troska - without giving any further details.

In 2019, Daimler is planning the first model of its all-electric brand EQ. So far, only the E-Class, C-Class and the sporty SUVs GLA and GLC have been produced in China. Together with the Chinese partner BYD, the Germans are also producing the Denza electric car there.

E-mobility is favored

In China, pure electromobility is clearly favored, Troska added. But Daimler will continue to build plug-in hybrids there. The Daimler Board of Management is certain that in five years there will be electric vehicles and the infrastructure in China. "Then we'll see if the fish likes the worm," he said, referring to the customer interest. In 2015, 188,000 electric cars were sold in China, three times as many as in the previous year.

The demand in China for Internet services in cars is particularly high. The activation rate of the so-called Concierge Services in the E-Class, with the help of which motorists receive recommendations via a call center at the push of a button, is 90 percent. At the same time, one is in the process of integrating the services of Chinese Internet giants such as Alibaba, Tencent or Baidu. “It is an illusion to believe that we could draw customers into our ecosystem,” says Troska. Tencent's widespread messenger service WeChat, for example, is also used for location information or for payments, which can be helpful in the car.

With a share of almost a fifth, China is now Daimler's most important single market worldwide and is partly responsible for the good development of the auto division this year. Worldwide, the Stuttgart-based company increased its sales by 12.2 percent to 2.023 million vehicles of the Mercedes-Benz and Smart brands by the end of November, thus exceeding total sales in the previous year. In addition to China, Europe in particular developed robustly (plus 12.8 percent), while US business weakened (minus 0.2 percent). (dpa)