Mercedes-Benz cars for China sales to be 40% locally made

Shanghai, May 21 (Gasgoo.com) This month, the low proportion of locally-made Mercedes-Benz cars sold in China has been a hot topic in country's auto industry. It is very difficult to boost the local production rate of the renowned brand cars and as a result its price will not go down, thus slowing down its sales growth in the booming Chinese market. Even so, Mercedes-Benz cars for China sales will strive to be 40% locally made in the coming two years to drag themselves out of the mire.

In the first quarter this year, a total of 9,600 Mercedes-Benz cars were sold in China (including Hong Kong and Macao), up 40% year-on-year (y/y), with 8,600 of these vehicles sold in China's mainland, up 42 y/y. Imported Mercedes-Benz S-Class sedans and Mercedes-Benz luxury SUVs are best sold in China, which is now the second market in the world for Mercedes-Benz S-Class sedans.

But China-made Mercedes-Benz sedans only sold 1,400 units in the first three months this year, far from the 50:50 sales rate target (of imported and locally made Mercedes-Benz cars) set by the brand's sales executive in late 2007. The sales of Mercedes-Benz E-Class sedans didn't turn better either in the same period, even two years after they started to be locally produced.

Pressured by the rising sales glory of imported Mercedes-Benz, Beijing Benz Daimler Chrysler Automotive is confronted with a thorny issue of how to operate itself better to reverse the loss-making trend: the joint venture reportedly lost 700 million yuan ($100.3 million) in 2007 and the figure is likely to hit 1.2 billion yuan this year.

Although the locally made Mercedes-Benz sedans have not sold well, the manufacturer of this brand will continue to make these cars in China. Both the E-Class and C-Class sedans of Mercedes-Benz for China sales will strive to reach the 40% local production target in the next two years.

These best sold Mercedes-Benz sedans, especially those of the E-Class and S-Class, will be further locally produced in China for their market growth, said the brand's sales executive.