Daim­ler shifts to com­pacts

Shanghai Daily - - BUSINESS - Jin Jing

DAIM­LER AG plans to in­crease the pres­ence of its Mercedes-Benz cars in China by fo­cus­ing on pre­mium com­pacts as it seeks strong growth amid higher fuel prices and in­ten­si­fied com­pe­ti­tion.

The Ger­man lux­ury car maker plans to pro­duce four new mod­els in China af­ter Daim­ler and Bei­jing Au­to­mo­tive In­dus­try Corp signed a 2-bil­lion- euro ( US$ 2.9 bil­lion) deal.

“As early as 2020, at least one in five pre­mium com­pact cars is ex­pected to be sold in China,” said Di­eter Zetsche, chief ex­ec­u­tive of­fi­cer of Daim­ler.

“In the light of this enor­mous growth po­ten­tial, we are res­o­lutely switch­ing to at­tack mode with the lo­cal pro­duc­tion of our new com­pacts,” he said.

Daim­ler will start mak­ing Mercedes- Benz GLK com­pact sport-util­ity ve­hi­cles in China this year through its joint ven­ture Bei­jing Benz Au­to­mo­tive Co. An­other three Mercedes-Benz pre­mium com­pact cars will fol­low as of 2013.

Amid heated com­pe­ti­tion with BMW and Audi, Daim­ler’s shift to lux­ury com­pact cars comes as more Chi­nese con­sumers seek smaller cars that are more fuel ef­fi­cient due to ris­ing fuel prices.

En­try- level mod­els

are

also ap­peal­ing to bud­get-minded con­sumers amid slow­ing eco­nomic growth.

Mercedes- Benz es­ti­mated de­mand for pre­mium com­pact cars will grow to more than 2 mil­lion units an­nu­ally in China by 2020, up from last year’s 770,000 units. That would boost China’s share of global pre­mium com­pact sales to more than 20 per­cent from 12 per­cent now and make it the largest mar­ket for pre­mium com­pacts world­wide, the com­pany said.

Mercedes- Benz sold 147,670 units in China last year, a jump of 115 per­cent from 2009. Sales rose 70 per­cent to 78,140 units in the first five months of this year.

cur­rency swap ar­range­ment.

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