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'Mercedes to Beat BMW in Two Years'
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Mercedes Benz, the premium car unit of DaimlerChrysler AG, said it aims to overtake main rival BMW in annual China sales within two years, but needs more time to beat Audi.


Mercedes Car Group Chairman Dieter Zetsche told China Daily: "I do believe that Mercedes Benz continues to have the top reputation in China. We have started local production and we are developing our dealer network very fast. On that basis, I'm confident that in the near future, we will pass BMW in sales (in China)."


It's a "realistic expectation" for Mercedes Benz to overtake BMW in China sales in two years, said Zetsche, also chief executive officer of DaimlerChrysler.


But, given Audi's long-established production in China and its special status as a government car, Zetsche said that surpassing Audi would not happen very soon.


Mercedes Benz's China sales lag behind Audi and BMW mainly due to its later local production.


In the first 10 months of this year, Mercedes Benz's combined sales on the Chinese mainland and in Hong Kong grew 36 percent year-on-year to 18,000 cars.


The company started to produce its E-Class sedans at the beginning of this year at DaimlerChrysler's joint venture with Beijing Automotive Industry Corp.


Last week, Mercedes Benz introduced its new-generation E-Class sedan to the venture. Zetsche said Mercedes Benz would also begin production of its new-generation C-Class sedan in China next year.


Audi, China's biggest premium automaker, sold 66,000 cars on the mainland in the first 10 months of this year, up 60 percent year-on-year. It launched local production in China more than two decades ago.


BMW's January-October sales on the mainland surged 53 percent year-n-year to 29,300 units. It started to assemble its 3 and 5 Series sedans in China in 2003. Analysts expect the premium car market, especially entry-level premium models, to have great growth potential in China.


Yale Zhang, director of emerging-markets vehicle forecasts at auto consultancy CSM Asia in Shanghai, said sales of entry-level premium cars, such as the Mercedes Benz C-Class, the Audi A4 and the BMW 3 Series, will enjoy a big jump in the next five years as the number of young wealthy people continues to grow in China.


"Five or 10 years later, it's hard to say who will be the biggest player in China's premium car market among the three German carmakers. However, Audi's leadership will remain unchallenged in the short term due to its early local production and big customer base," Zhang said.


Audi is the biggest supplier of cars for high-ranking government officials in China, which Zhang said had significantly raised the standing of the brand. Audi said it expects to boost its annual sales in China to 100,000 cars in 2008 or 2009, with the figure set to rise to 200,000 units in 2015. It expects its total sales for 2006 to be 80,000 units.


Benjamin Asher, the Bangkok-based analyst of Automotive Resources Asia Ltd, said earlier that Mercedes would also find many government buyers in Beijing.


"Mercedes is also known as the car to ride in. China's established wealthy are still more inclined to ride than drive," Asher said.


In contrast, BMW's brand image in China has been downgraded a little by the fact that many of its customers are nouveau riche.


Mercedes Benz now has 71 authorized dealers in China, compared with Audi's more than 120 and BMW's 60.


(China Daily November 21, 2006)


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