Cars

Daimler sees China 2011 sales outgrowing market

(Agencies)
Updated: 2011-01-17 15:08

SHANGHAI - Daimler AG's sees China sales exceeding the 10 percent overall growth of the car market this year, a senior company executive said on Saturday.

Global luxury car makers, from Bayerische Motoren Werke AG or BMW to Audi AG, have racked up eye-popping sales in China, where a growing army of the super-rich is fuelling demand for luxury items, from Gucci handbags to Rolls-Royces.

"We want to grow faster than the 10-15 percent, our condition is that we grow faster than the total market and also the luxury car market," Klaus Maier, chief executive for Mercedes-Benz's China operations told reporters in Shanghai. China has been a major bright spot amid a global industry which are still recovering from a steep downturn.

But car sales this year will slow down considerably or even decline, as one industry observer had warned, after Beijing scrapped its incentive plans for small cars.

The Beijing city government's recent move to impose quotas on new car registrations and possibly similar moves by other big cities to tackle traffic gridlock will also apply the brakes on the market. Ulrich Walker, chief executive of Daimler Northeast Asia, said he did not believe these measures would have much of a negative impact, as rising incomes and mobility are bringing new customers into the firm's fold. "At the moment if you are talking about the (sales) volume, more than 50, 60 percent are on the east side of China, if you go west, there is a huge potential of customers who want to have mobility," Walker said. Daimler makes Mercedes-Benz E-Class and C-Class cars in a tie-up with Beijing Automotive Industry Holdings Co (BAIC) is also in discussions to expand the joint venture's product portfolio to include Mercedes-Benz A-Class and B-Class vehicles, Walker said.

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In 2010, a total of 147,670 Mercedes-Benz cars were sold in China, up 115 percent. Volkswagen's Audi sold 227,928 units while BMW sold 168,998 units.

Daimler Chairman Dieter Zetsche said in October 2010 he aimed to sell 300,000 Mercedes-Benz cars in China annually in 2015.

The German automaker is also investing 3 billion euros in China over the next five years to expand its capacity and dealer network, including a new engine plant for Mercedes-Benz. Walker said the firm also hopes to increase localized capacity to 200,000 vehicles by 2015, in Line with Zetsche's statement that 70 percent of Mercedes-Benz models sold in China will be locally made by that time, up from 30 percent currently.

Maier said the firm aims to add between 25 to 30 new car dealers this year.

Daimler is also among the front runners to go green. It unveiled plans in March 2010 to develop electric cars in China with BYD , a car and battery maker backed by US billionaire Warren Buffett.

Walker said the cooperation with BYD will lead to a jointly-developed fully electric compact car segment under a new brand to be launched in 2013.

He also said the firm's joint venture with Beiqi Foton Motor will make Foton Auman trucks that will use a Mercedes engine.