China drives sales growth for global carmakers

By Wang Cong Source:Global Times Published: 2017/1/9 22:23:39

Investing in local production, R&D capacity key to success: experts


Dieter Zetsche, chairman of the board of Daimler AG and head of Mercedes-Benz Cars, speaks during new product introductions on the eve of the 2017 North American International Auto Show in Detroit, Michigan on Sunday. Photo: CFP

Dieter Zetsche, chairman of the board of Daimler AG and head of Mercedes-Benz Cars, speaks during new product introductions on the eve of the 2017 North American International Auto Show in Detroit, Michigan on Sunday. Photo: CFP



The Chinese auto market has become increasingly the driving force of sales for many global carmakers, as manufacturers from the US, Germany, the UK and Japan all reported sales increases in the world's largest market.

The trend is only likely to grow given the scale of the Chinese auto market and its relatively high growth rate, despite slowdowns in recent years, experts said on Monday, adding success in the Chinese market requires increased efforts in localized production and research and development (R&D).

Mercedes-Benz on Monday claimed that 2016 was the "most successful year" in its history due in large part to its strong growth in China.

The Germany luxury car brand delivered 2.08 million cars across the globe in 2016, up 11.3 percent from 2015, beating its German and other competitors in sales growth and the number of vehicles delivered in the year, the company said in a press release.

Sales growth in the Chinese market helped Mercedes-Benz in 2016, the sixth record year in succession, Dieter Zetsche, chairman of the board of Daimler AG and head of Mercedes-Benz Cars, said in the press release.

In China, Mercedes-Benz sales reached a record high of 472,844 vehicles in 2016, up 26.6 percent year-on-year, making China the largest individual market for Mercedes-Benz once again, according to the company.

Mercedes-Benz is not the only one. Though Mercedes-Benz's two other main German competitors haven't released full-year data yet, BMW Group and Audi AG reported sales growth of 11.2 percent and 5.7 percent, respectively, in the Chinese market in the first 11 months of 2016, the Xinhua News Agency reported.

British premium car manufacturer Jaguar Land Rover posted year-on-year growth of 36 percent in the Chinese market in 2016, the company said on Monday.

US-based Ford Motors also posted record sales in China for 2016, delivering 1.27 million cars in the country, up 14 percent year-on-year, the company announced on Wednesday. Fellow US carmaker General Motors and its joint ventures in China reported record sales of 3.87 million cars in 2016, up 7.1 percent year-on-year.

Two Japanese carmakers - Toyota and Nissan - each reported sales growth of 8 percent or better for 2016, while Honda estimated its growth rate was 7.4 percent, the Japan News reported on Sunday.

All these sales numbers point to one thing: The Chinese market is becoming increasingly essential for sales success for any car company in the world, especially in the premium segment, according to Mei Songlin, vice president and managing director of China operations at J.D. Power.

"And there is no sign that the trend will ease," Mei told the Global Times on Monday, noting that with more young motorists in China who aim to upgrade to premium cars, demand will further expand.

The key to success in the Chinese market is to expand product offerings to meet the various demands of consumers and increase localization of production R&D, said Zeng Zhiling, an analyst at Shanghai-based consultancy LMC Automotive.

The success of Mercedes-Benz in 2016 was mainly due to its wide range of models from the C-Class to E-Class to G-Class sport utility vehicles, Zeng told the Global Times on Monday.

Furthermore, he added, Mercedes-Benz has been intensifying efforts in localizing production and R&D, incorporating Chinese characteristics in its design and production of cars, such as the launch of a long-wheel base E-Class sedan specifically for the Chinese market.

"Localizing production and R&D is a growing trend for foreign carmakers in China, and that won't change in the near term," Zeng said.


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