Daimler to to import Mercedes China luxury market

DAIMLER AG is considering introducing more luxury small engine vehicles into China next year to meet increasing demand.

The world's second largest luxury car maker plans to importing the Mercedes Benz Smart Fortwo compact into China from next April.

The Smart will sell within a 160,000 yuan to 200,000 yuan (US$23,500-US$29,400) range per unit.

Daimler AG will also introduce a smaller engine SUV vehicle, called the GLK, in spring, Klaus Maier, chief executive officer of Mercedes-Benz (China) Ltd said in Shanghai yesterday.

The move reflects trends in the luxury car segment which is being affected by rising fuel prices and the consumption tax pushing customers towards smaller premium, said Maier.

He said the two new cars were smaller and they would suit current conditions.

Maier said the market potential for smaller vehicles had been proven with the positive acceptance of the company's 3.0-liter S series.

The introduction of small luxury vehicles is a strategy Mercedes-Benz is using to boost sales in China which is a priority market for luxury car makers to maintain growth amid the global economic recession.

China's luxury car market has grown at 30 percent each year over the past three years.

But a 50 percent slump on the stock market as well as the implementation of a higher consumption tax on big-engine vehicles for environment reasons threatens to reduce market demand.

As a late market entrant to China, Mercedes-Benz is playing a quick catch up to BMW and Audi.

Apart from the smaller car, Mercedes-Benz is also sparing no effort on the development of alternative vehicles.

Volker Mornhinweg, chairman of the Mercedes-AMG GmbH board, said the company planned to launch the hybrid S400 next year.

Meanwhile, it is also cooperating with one of German's largest energy companies to introduce a fleet of electric Smart models in London.