BEIJING – The luxury German automaker Mercedes-Benz is preparing to showcase its strategy for surviving China’s brutal automotive marketplace at this year’s Beijing auto show, as CEO Ola Kaellenius declares the company won’t engage in aggressive price cutting despite mounting competitive pressures.
The Stuttgart-headquartered manufacturer, along with other established European brands like BMW, is working to regain its footing in the globe’s biggest automotive market as aggressive local competitors offering cheaper alternatives continue gaining ground, leading to declining sales for traditional foreign brands.
“I wouldn’t count on the intensity of competition suddenly disappearing – and that’s not our plan,” Kaellenius told reporters on the eve of the show.
The company’s approach centers on technological advancement and building stronger local partnerships with suppliers and development teams rather than competing solely on price.
Kaellenius emphasized that Mercedes will resist entering into price battles with Chinese manufacturers, stating the company would rather sacrifice certain sales numbers in lower-tier markets if competing there makes “less economic sense.”
Chinese automotive companies such as BYD have successfully challenged foreign manufacturers’ historical control over budget vehicle segments using affordable electric models, and are now targeting luxury markets, creating additional challenges for Mercedes, which saw regional sales plummet 27% during the first quarter.
The German automaker’s China strategy includes launching seven fresh models through 2027 and introducing sophisticated driver assistance technology developed alongside Chinese technology partner Momenta. The Beijing show will feature the premiere of an updated electric GLC model with two configurations designed specifically for Chinese buyers.
“It would be completely wrong to believe that pedigree does not matter. It does matter,” Kaellenius said when asked whether Mercedes’ heritage carried the same weight in a tech-driven market.
However, he acknowledged that younger Chinese customers show greater willingness to explore different automotive brands, describing the situation by saying, “It’s a complete roller coaster market.”
