Economic growth across China might be weaker than any point in the past 7 years, but the appetite in the country for luxury, premium autos is bigger than at any time before.
Mercedes Benz, which Daimler owns, just reported a rise of 24% in China’s sales during the first quarter.
China became the automaker’s largest single market anywhere after its sales surged by 40%.
Over the last two years, a lot of effort by the company has been put into R&D, design and bringing the products that are right to China, and it is now paying off, said a board member at Daimler who is in charge of the business in China.
Mercedes’ largest plant for manufacturing in the world is located in Beijing and not in Stuttgart its German hometown.
Robots and workers at the factory in China churn out four types of models, including small SUVs and sedans.
Mercedes started making vehicles in China later than its two rivals Audi and BMW did. Producing vehicles locally has enabled foreign brands to bring the costs down and grow more quickly.
It began a local production of another model of an SUV, the GLC late in the year.
Mercedes has ramped up its advertising and grown.
General Motors will show off its new Cadillac XT5, a crossover SUV model that has recently begun is production in China.
With more competition and the cooling of the economy in China, that means Mercedes is not expected to do as they did a year ago.
Additional growth is needed, but still China’s growth is far over what we see in Europe, said a Daimler executive.
He has forecast healthy SUVs in China, 10.6% growth in Hong Kong.
Mercedes has enjoyed excellent sales in Asia and if China is able to begin to grow again or at least keep its 6% to 7% growth annually, the luxury carmaker will continue to enjoy success there.