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Nine months make million yuan difference

By Li Fangfang (China Daily)
Updated: 2008-04-21 11:10

After only nine months in China, Mercedes-AMG celebrated sales revenue of more than 300 million yuan ($42.85 million). No wonder Mercedes-AMG management board chairman Volker Mornhinweg looks so happy.

Last year, AMG sold 20,000 units of high-end vehicles worldwide. US sales contributed half of the total figure, followed by Japan, Germany and South Africa. About 300 of the hand-made engine powered luxury sedans were sold in China.

"I believe in the next few years, China will be listed in our top markets," says Mornhinweg.

Mercedes-AMG is the high-performance brand of the Mercedes-Benz car company. Mercedes-Benz acquired majority interest in AMG in 1998 and in 2005 AMG became a wholly owned arm under Daimler-Benz's umbrella. It came to China in March 2007.

Compared to its rivals, it might seem that that Mercedes-AMG came to the Chinese market a little late, but Mornhinweg says he has high hopes based on a "very promising beginning".

"But for a new team, especially for such a high-end product, the sales of 300 units in only nine months is far beyond our expectation. It's a very promising beginning in China, and we are pleased to see that the consumers are accepting the AMG brand," says Mornhinweg.

In China, most people are still not familiar with AMG, however, in the global auto industry, the three letters signify refined German auto engineering and powerful performance with a 612 horsepower engine that powers the vehicle from zero to 100 km per hour in 4.4 seconds.

Since 1988, Mercedes-Benz has had a strategic partnership with AMG to refit Mercedes-Benz models with AMG engines.

When Mercedes-AMG debuted in China it released four models, representing the most exclusive and sporty version of their class, with prices at between 1.49 million yuan and 2.98 million yuan.

Compared with basic Mercedes-Benz sedans, the AMG lines are at least 1 million yuan more expensive. However, the three letters have a magical attraction to auto fans.

"We are unique for all AMG engines are hand-made under our 'one man, one engine' philosophy," says Mornhinweg. "Each AMG engine builder stamps the engines they produce with an engraved plaque depicting their signature. There are 60 of the best engineers in Germany working for AMG."

As a customized brand "we are considering making some changes catering to the tastes of Chinese consumers, such as colors or materials. However, we won't change a lot to achieve a big sales volume," says Mornhinweg.

Originally, AMG lines were sold through Mercedes-Benz's distribution network. After establishing its first AMG center last year, now it has 100 dealerships worldwide.

In China, AMG has set up 13 distribution centers and a sales headquarters in Beijing.

"All of our staffs have to accept training at the headquarters to have a deep understanding of the AMG brand as well AMG products before they take the sales posts. Service is vital for such a high-end brand," he says.

Though AMG has only launched four of its 18 models in China, Mornhinweg says the company "will introduce new models step-by-step, matching the demand of this emerging luxury sedan market."

To publicize the brand, AMG held road shows in big cities last year, inviting potential consumers sample a taste of AMG with test-drives.

In Europe, the average age of AMG customers is around 45.

"However, in China, they are much younger so we also target the newly rich and entertainment stars as our target consumers," says Mornhinweg.