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Mercedes-Benz Focuses on Chinese Market

The global growth of car sales will undoubtedly be powered by a booming Chinese market, said a top DaimlerChrysler AG executive.


According to DaimlerChrysler statistics, a total of 45 million cars were sold throughout the world last year. With the growth of sales slowing in Europe, North America and Japan that are the largest consumers of cars things have been picking up in Southeast Asia, Latin America and China.


Annual sales globally are expected to reach 60 million units in the next 10 to 15 years, and China's booming market will contribute significantly to the growth, said Juergen Hubbert, a board member of DaimlerChrysler and chief executive of its Mercedes Car Group.


At present, the world's 10 leading international auto giants have captured about 95 percent of the global auto market. To survive and break new ground in the highly competitive sector, each is developing new products to meet the demands of customers.


Following this tack, DaimlerChrysler AG the world's biggest car maker recently launched a new version of the Mercedes-Benz A-class to compete with luxury models from its rivals and boost profitability.


The new model has two body versions, in addition to a versatile five-door version.


Mercedes is also, for the first time in the model's range, launching a three-door model that will attract buyers through its sporty, youthful image, the company says.


"The new A-class is well on its way and is becoming profitable," Hubbert said during an interview with Chinese reporters at the A-class' premiere in Athens.


The car, revamped but based on the original A-class that was introduced in 1997, will be available to customers in autumn and is expected to be more profitable.


According to the company's latest report, the three-door A 150 version costs 17,632 euros (US$21,736) while the five-door version costs 18,502 euros (US$22,809).


Mercedes will export the A-class to China. When asked if the model would be produced in China, Joachin Schmidt, Mercedes group's executive vice-president of sales and marketing, said Mercedes would follow a steady expansion in China and choose products which were more suited to the local market.


The E and C-class sedans are core products of Mercedes.


"We think these models meet the Chinese market and have development potential in China," Schmidt said.


Hubbert confirm-ed that the company has received project proposal approval from Beijing Automotive Industry Holding Co Ltd to manufacture the C and E-class sedans in China.


A new factory will be built by Beijing Jeep Corp, a joint venture established 20 years ago by Beijing Automotive Industry Corp and DaimlerChrysler.


An initial annual production capacity of 25,000 C-class and E-class sedans will be realized by the new factory in 2005.


Mercedes' high-quality products, international service standards and Chinese people's enthusiasm for its vehicles give Hubbert confidence when discussing sales in China.


Mercedes, which started selling cars in China in the 1930s, has accumulated a rich marketing experience in the country, he said.


At present, the company has 42 outlets throughout the country. With a sales target of about 14,000 units this year, up from 2003's 9,000 units, the number of outlets will increase to 50.


Annual sales are expected to reach 50,000 units in the next five to 10 years, when about 150 outlets will be open.


(China Daily July 12, 2004)





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