Holding brand values to the letter keeps Mercedes-Benz on its toes
The premium auto segment has bucked the trend with 10 percent year-on-year growth so far in 2018, while the whole industry is undergoing a slowdown. Against this backdrop, Mercedes-Benz is still maintaining its brand values as the core in business rather than pursuing good-looking numbers.
“We want a business that is still sustainable, that is not built on a detraction from our brand value,” said Nicholas Speeks, president and CEO of Beijing Mercedes-Benz Sales Service Co Ltd.
The company remains in a leading position in the premium market in China, having delivered 564,945 vehicles in the first 10 months, showing 11 percent year-on-year growth.
In the same period, a total of 19.3 million passenger vehicles were sold in China, a 1 percent dip year-on-year, according to the China Association of Automobile Manufacturers.
“Yes, the auto market in China is seeing flat growth this year, yet it is flat at a very high level,” Speeks said.“We remain confident in China and we remain confident in the business we have set up” he added.
Speeks gave similar expressions to boost confidence in China’s business environment in his speech at a news conference held on Friday in Guangzhou, during which almost one-third of his remarks were in Mandarin and Chinese dialects.
The latest evidence to back up such confidence came on Wednesday when Daimler, the parent company of MercedesBenz, announced it will invest over 1.1 billion yuan ($158.6 million) into a new local research and development tech center in China, which will enable them to better understand the market demands and to accelerate localization to further delight Chinese customers.
Such investment stands out especially when market growth is slowing down during a period of industry transition.
“The Chinese market, which is fairly young still, has had a spectacular growth path, but every road has some difficulties,” he said. “There will always be difficulties but the Chinese have already proven that they are well-equipped to deal with it, so we have no worries.”
The market is much bigger than the mature markets, so there is plenty of room to sustain a healthy business, he added.
The principal motivations that triggered the company to insist in sustaining such “healthy business” are the importance of the brand value to customers and to better protect value for the company’s partners.
“We want to offer our customers value. We want to be fair. We want to make sure the dealers who represent us in the cities around China are doing a good job so that we can meet or even go beyond our customers’ expectations.”
“Customers chose MercedesBenz amid the premium brands, and they don’t wish to see the value decline of the products they just bought,” he explained. “Mercedes-Benz has a value, and it is sustainable. If you buy a Mercedes, you want to make sure that is an investment and that it retains its value.”
Meanwhile, when it comes to satisfying customers, he said the company aims to transform from being “sale-oriented” to be “customer experience-oriented”.
For instance, the Mercedes me store, a well-known exemplary of their latest pattern of touchpoints for customers and brand enthusiasts, will unveil another two outlets in Chengdu and Shenzhen next year, in addition to the pair in Beijing and Shanghai.
Some innovative concepts are being implemented such as She’s Mercedes, introduced three years ago, which now provides a tailor-made community that has registered over 60,000 female customers and fans today, he said.
In addition to the tailor-made services, the company also brought about customized products. This year is expected to witness Mercedes-Benz delivering 12 new or face-lifted models to meet their commitment in 2018.
One such product is the all New A-Class L sedan, which will be officially launched on Friday this week. It is tailored to the needs of young Chinese customers for enhanced space in the rear compartment and cuttingedge connectivity technologies.
“You saw the all-new A-Class L sedan displayed at Auto Guangzhou,” Speeks said. “If you want to buy a car that is made for China that has the attributes meeting demands from Chinese customers, then you have to have a focus.”
Another reason the company has retained brand value is to ensure local dealers’ and partners’ interests as well.
Currently, the German automaker is working together with a few local partners in its core business as well as new fields of mobility, such as BAIC with its locally produced Mercedes-Benz products, BYD with Denza, and Geely with premium car hailing services, and also with some local tech giants and universities on autonomous driving.
“It’s good to have friends,” Speeks said, adding that China is a big country, and it is good to have partners to work with during the carmaker’s process of understanding China.
The sustainability of Mercedes-Benz in the future is not to be undermined by ad-hoc decisions taken in the moment, he said. “The decisions need to be made with partners.”
The automaker is already well on its path into the future vision with the EQC, the first pure-electric production vehicle from the automaker, coming up at the end of 2019 with local production. Having celebrated its world premiere in Stockholm earlier this year, it began a new era of mobility for the automaker.
Speeks said the launch of more electric and battery electric vehicles is planned for the years to come.
Yet as a new and highly promising market, the production of electric vehicles also brings many competitors, such as NIO and Tesla, who are also making themselves known in the Chinese market.
We remain confident in China and we remain confident in the business we have set up.” Nicholas Speeks, president and CEO, Beijing MercedesBenz Sales Service Co Ltd
But Speeks remains positive as well, and stated that: “The pace of innovation and change in China is unique. I think it’s good and it keeps us on our toes.”
“New players bring new ideas and concepts, which is good for customers, for the business and for us.”
“Though the road ahead is torturous, our prospects are bright,” Speeks said as he gave his expectations about the Chinese market.
“We want to be there in another 100 years and not fall asleep at the wheel.”