Mercedes-Benz used this year’s Beijing Auto Show to lay out its strategy in the face of an extremely competitive Chinese market. CEO Ola Kallenius admitted to being under strong pressure, but also clarified that the German company ndoes not intend to be drawn into a price war. “I wouldn’t count on the intensity of competition suddenly disappearing, and that’s not our plan,” he stated on the eve of the fair.
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Mercedes and the strategy for China
In a context marked by declining sales and fierce competition with domestic rivals, the Star brand is trying to defend its position by focusing on more selective industrial and commercial choices. In the background is the ruthless challenge from local brands, often more accessible and perceived as quicker in innovation, in addition to pressure from historical competitors like BMW. To react, Mercedes and other companies are seeking to reassert their appeal in the world’s largest automotive market, combining product innovation and a strengthening of their “local” presence throughout the supply chain, both in suppliers and in development. Kallenius indicated that Mercedes might give up some volumes in lower segments if they prove to be “less economically advantageous”.
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Seven new models by 2027
Looking ahead, the German company plans to renew its range in China with seven new models by 2027 and to introduce advanced driver-assistance systems co-developed with Chinese technology company Momenta. In Beijing, it also presented a new 100% electric GLC with two exclusive versions dedicated to the Chinese market. In parallel, Mercedes is also grappling with changing consumer mindsets: Kallenius acknowledged that brand prestige matters, while being aware that young Chinese customers are more inclined to quickly compare available options, describing the market as “completely on a rollercoaster“.
