The fierce competition in the Chinese automotive market has put unprecedented pressure on luxury car giants.
According to Bloomberg report on July 30th, Ola Källenius, CEO of Mercedes-Benz Group, stated that the increasingly competitive environment in the Chinese automotive market will not disappear soon. 'This has become a new reality.'
During an interview at an event near Helsinki, Finland, Kang Lin Song said that Chinese car brands are investing 'huge amounts of money' to accelerate their entry into the luxury car market, and to challenge traditional dominant models such as the Mercedes-Benz S-class and G-class.
"China's market competition intensity, I believe, will not weaken in the short term." He said.
Kang Linsong, Bloomberg's illustration
According to reports, in recent years, Chinese automakers represented by BYD have been expanding rapidly in the world's largest automobile market, leveraging their advantages in new energy vehicles. The rapid launch of new models has also intensified market competition, resulting in pressures on sales volumes for traditional luxury brands such as Mercedes-Benz, Porsche, BMW Group, and Audi under the Volkswagen Group. These brands are seeking ways to reduce costs and increase efficiency.
However, Kang Lin Song also stated that Mercedes-Benz remains a leader in the field of premium luxury cars, including its high-performance models like the Mercedes-Benz AMG.
Facing pressure from the Chinese market, Mercedes is seeking growth opportunities by launching new models. The trip of Kang Lin Song to Finland was aimed at showcasing the new generation GLA compact SUV. This model offers various power options, including a pure electric version. The pure electric version has a maximum range of 657 kilometers, and its starting price in Germany is approximately 48,600 euros (about 377,000 yuan).
The report indicates that the launch of GLA is seen as a attempt by Mercedes-Benz to revive sales while avoiding sacrificing profit margins. Due to weak demand in China and its previous focus on higher-priced models, Mercedes-Benz is facing pressure from the cooling global luxury car market.
Mercedes reported its financial results this week, stating that it will continue to implement cost-cut measures, especially in Germany, to support its profit performance.
In the second quarter of this year, Mercedes-Benz's sales in the Chinese market declined by 30%. Kang Linsong stated that this decline is not much different from the overall decline in the Chinese automotive market. The company is managing pricing in the Chinese market with "as much caution as possible and while maintaining financial health."
