Why Mercedes-maker Daimler is bullish about China as a ‘super market’
China is the world's biggest auto market. China is the biggest player in luxury car segment. China is the world's largest EV market. And it is the world's largest vehicle producing country. Little wonder then that automotive brands tend to pay special attention to all the developments here. And Mercedes-maker Daimler is quite upbeat about what it expects to be a positive year ahead for the company in this particular market.
Daimler China chief Hubertus Troska recently told journalists in Beijing that he expects 2022 to be a strong year for the Chinese automotive market. "Everything speaks for the fact that China will be a super market next year as well," he reportedly said, adding that while electric vehicles (EVs) are the future, the scale of the market in the country means that conventional vehicles will remain relevant. “It's a huge country, so in my view there will still be internal combustion engine cars in China for some time."
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Whether EVs or vehicles with combustion engine, Mercedes has had it good in China despite the pandemic. In 2020, sales rose by 12% to 774,000. This year so far, and despite the semiconductor shortage issue across the world, the company is up 8%. China, in fact, accounts for a third of Daimler's overall revenue.
And next up may well be expansion of EV portfolio as despite a strong faring thus far, Mercedes' role in this space is rather limited in comparison to players like Tesla, Volkswagen, Hyundai and several local rivals. The plan is to take the number of battery-powered models to five by next year. These may well be priced above what is on offer from many local rivals but the Germans are banking on the luxury image of the brand to strike a chord with prospective customers.
(With input from Reuters)