Mercedes-Benz strives for ‘mutual success’ in the Chinese market
As China accelerates sweeping changes in its automotive industry, Mercedes-Benz wants to make sure it sustains mutual success in its largest market, said Dieter Zetsche, chairman of the German premium carmaker’s parent company Daimler AG.
“These days everybody’s talking about the need for change. But change is nowhere more evident than here in China,” Zetsche said during his address at the China Development Forum in Beijing on Monday.
This is the first time that the chairman has made an official visit to China this year, where the carmaker sold more than 610,000 Mercedes-Benz and smart-branded cars in 2017, up 25 percent yearon-year.
Zetsche said that globally the car is turning into the ultimate platform based on connectivity, autonomous driving, sharing and electric mobility, which Daimler sums up as CASE, and their combination will create the biggest upgrade of the car since its invention.
“We believe China can ‘turbocharge’ our industry’s transformation,” Zetsche said.
He applauded the country’s massive achievement in the auto industry and said the carmaker is committed to developing together with China.
Now the world’s largest new energy car market, China is likely to defend its title for years to come, said the chairman.
Statistics from the China Association of Automobile Manufacturers show that 777,000 electric cars and plug-in hybrids were sold in 2017. The association expects sales to exceed 1 million this year.
China expects such cars to account for 20 percent of its total car sales in 2025, according to an industry development guideline released by the Ministry of Industry and Information Technology last year.
The prospects have attracted Daimler to increase its investment in the country.
“We want to contribute even more to the development of China’s e-mobility market,” Zetsche said. “We are getting ready to build Mercedes-Benz electric vehicles here in China.”
In late February, the company announced an investment of over 11.9 billion yuan with its Chinese partner BAIC to build a second production facility in Beijing to produce gasoline and electric cars.
According to Daimler, the plant will allow the manufacturer to respond to increasing market demand with local models tailored to the needs of Chinese customers, including electric products from Mercedes-Benz’s EQ brand.
Its first battery-powered EQ serial model EQC will roll off the production line in China in 2019. It also plans to localize fully-electric compact cars in the coming years.
Zetsche said the batteries of those electric cars will feature Chinese cells, adding that contracts have been signed. He said he also expects Mercedes vehicles in other countries to use Chinese cells as well.
Daimler has said it will also further new energy car development in China, the company’s largest market globally, as part of its Made in China, for China commitment.
Earlier this month, Daimler became a shareholder in Beijing Electric Vehicle Co Ltd, a subsidiary of BAIC Group, through the acquisition of a 3.93 percent stake.
Daimler said the closer cooperation with both BAIC and BJEV will allow it to further deepen its understanding of Chinese consumers’ needs about new energy cars.
It is expected that vehicles with some autonomous functions will account for 50 percent of new vehicles sold in China by 2020, according to a guideline released by the National Development and Reform Commission in January.
Zetsche said Daimler has been conducting major research on automated driving in Beijing, and has joined hands with local companies.
One of them is Chinese internet search giant Baidu, which is running the Apollo program, an open platform on developing self-driving technology.
With Baidu, Daimler aims to research solutions for automated driving in China, and to obtain a profound understanding of the specific demands of automated driving in China and identify local, technical trends at an early stage.
Daimler is also a shareholder in Momenta, a Chinese startup focusing on deep learning, which will help foster further cooperation in automated driving technologies in the Chinese context.
Zetsche said Chinese customers are helping speed up the digital transition in the automotive industry. “The digital transition is not just backed by the government – it’s lived by customers,” he said.
In 2016, China had 731 million internet users, more than the European Union and the United States combined. Nearly one in five internet users in China rely on using mobiles only, compared with just 5 percent in the United States, according to global consultancy McKinsey.
It said the mobile payment penetration rate in China has increased from 25 percent in 2013 to 68 percent in 2016. Individual consumption via mobile payments totaled $790 billion in 2016, 11 times that of in the US.
Chinese customers are also more optimistic about new technologies such as autonomous driving, according to TUV Rheinland, an international testing service provider for quality and safety.
Based on a survey of more than 1,000 licensed drivers aged above 18 years in China, Germany, and the US, the German company found that more than 63 percent of respondents in China believe driverless cars will increase road safety, while the figure is 34 percent in Germany and the US.
Zetsche said the Chinese market is now driven more and more by innovation, and added that the company’s local research and development center is reflecting this change, having become a crucial part of its global R&D network.
We believe China can ‘turbocharge’ our industry’s transformation. We want to contribute even more to the development of China’s e-mobility market.” Dieter Zetsche, chairman of Mercedes-Benz’s parent company Daimler AG