Daimler shifts to compacts
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
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.