Sales in China are "red light", Mercedes-Benz can no longer lie down to win?

Rim visibility

2024-05-14 18:32Posted in Chongqing automotive creators

Image source: Du Ge

Photographed at the Beijing Auto Show in April 2024

Mercedes-Benz, which managed to stabilize sales in the Chinese market last year, has shown weakness this year.

According to the sales data released by Mercedes-Benz in the first quarter of 2024, Mercedes-Benz's total global sales in the first quarter were 568,400 units, of which 463,000 were passenger cars, which was about 8% less than the first quarter of 2023; Sales of pure electric models totaled 50,500 units, down 9% from the same period last year, of which 47,500 pure electric passenger cars were sold, down 8% year-on-year.

In the Chinese market, Mercedes-Benz's performance is even more optimistic, with a total sales of 176,600 units, of which 168,900 passenger cars were sold, down 12% from 191,000 units in the same period last year. The sales of pure electric passenger cars were only 6,300 units, far behind the old rival BMW.

As a result, Mercedes-Benz also suffered a setback in the first quarter, with operating income down around 4.4 percent, EBIT down nearly 30 percent, and net profit down about 25 percent.

In the view of "Rim Visibility", Mercedes-Benz's sales in China were able to remain stable last year, which has a certain relationship with the "price for volume" in the terminal market. However, it is difficult to hold the "country" with price reductions for a long time, and its performance in the first quarter of this year is a good proof.

At present, the risks and challenges of the global auto market are still escalating, and the competition in China's luxury car market is particularly fierce, and it is unknown whether Mercedes-Benz will be able to maintain its original position in China in the future.

1

Sales in China suffered a setback●

As the "troika" in the head camp of luxury brands, Mercedes-Benz, BMW and Audi have been secretly competing. In the past four or five years, including its MINI brand, BMW has won the sales championship in the Chinese market consecutively, while Mercedes-Benz is slightly inferior, although it has only been four months this year, but I am afraid that the situation will be the same.

In the Chinese market, Mercedes-Benz's performance this year is not satisfactory in terms of fuel vehicles or electric vehicles. In terms of total sales, Mercedes-Benz delivered nearly 170,000 passenger cars to Chinese users in the first quarter of this year, although it is still the region with the highest sales volume of Mercedes-Benz, but there was a year-on-year decline of nearly 12%, resulting in a year-on-year decrease of 8.9% to 5.793 billion euros in total revenue in the Chinese market.

In contrast, in the United States, the United Kingdom and France, Mercedes-Benz's sales in the first quarter of this year increased by 3%, 43% and 35% year-on-year, respectively, which makes the performance of the Chinese market seem a little out of place. In other words, the decline in Mercedes-Benz's global sales in the first quarter has a lot to do with the sluggishness of the Chinese market.

Compared with BMW, the BMW Group's cumulative global sales in the first quarter of this year were 594,500 units, a year-on-year increase of 1.1%. Among them, a total of 187,500 new BMW brand and MINI brand vehicles were sold in the Chinese market. It can be seen that BMW's two figures are also higher than Mercedes-Benz.

If we focus on the field of new energy, the overall sales of Mercedes-Benz's pure electric passenger cars in the first quarter of this year were 47,500, a year-on-year decrease of 8%. The BMW Group's sales of pure electric vehicles reached 82,700 units, a year-on-year increase of 27.9%, a sharp contrast between a decline and an increase.

According to the data of Chedi, Mercedes-Benz's sales of pure electric vehicles in China in the first quarter were only 6,300, of which the best-selling Mercedes-Benz EQE SUV sold more than 2,000 units. BMW has achieved 22,300 units, of which the BMW i3 has reached 11,700 units, and there is a large distance between the two.

As for the reason for the decline in sales, Mercedes-Benz officially explained that the shortage of spare parts that began in the fourth quarter of last year and the replacement of some models had an impact on the supply of some new cars in the first quarter of this year, resulting in the delivery of some models in the Chinese market could not fully meet the immediate needs of customers, and the relevant supply situation has gradually improved.

However, Rim Visibility believes that there are other factors behind this. First, Mercedes-Benz's electrification transformation is very slow, and it has become a "latecomer", and some of the "oil-to-electric" products launched are difficult to be recognized by consumers; Second, it has become more and more unstable in the era of fuel vehicles, and now in China's luxury car market, many independent new energy brands have successfully broken through, which is threatening the position of BBAs.

2

I bow my proud head ●

In the face of the intensifying domestic automobile "price war", Kang Linsong, chairman of the board of directors of Mercedes-Benz Group AG, said in an interview that Mercedes-Benz will not follow Tesla's pricing strategy and adjust prices according to the market. The constantly adjusting selling price will reduce consumers' psychological expectations of brand value and vehicle value retention rate.

He believes that for the Mercedes-Benz brand, providing consumers with new cars that are more durable and have more residual value is the primary goal in the future. That being said, Mercedes-Benz, which used to be purchased at a higher price, seems to have changed its "face" in the past two years, and has repeatedly made concessions on the price in the terminal market.

As early as the beginning of the previous year, there were rumors that Mercedes-Benz launched a "huge discount of 110,000 yuan". Although it was later found that this was just a marketing gimmick, consumers needed to meet the second-hand car replacement, installment loans, targeted subsidy policies at the same time, and the purchase of insurance, decoration, repair and maintenance packages in the store, etc., before it was possible to get it, but later Mercedes-Benz dealers around the country still had to launch a C-level cash discount of about 60,000 yuan.

Last year, on major automobile forums, you can also see information about the preferential promotion of many Mercedes-Benz models. For example, at the end of last year, the lowest configuration model of the 2023 Mercedes-Benz GLB has dropped to about 182,200 yuan in Shanghai and Beijing, which is as much as 117,600 yuan lower than the manufacturer's guide price.

This year, the phenomenon continues. "Rim Visibility" saw on the Autohome platform that there are many market posts about Mercedes-Benz's "substantial price cuts", "hot promotions" and "price reductions".

For example, in the Autohome Shanghai preferential promotion channel, it is reported that Mercedes-Benz C-class is currently carrying out preferential promotions in Shanghai, with a maximum discount of 129,900 yuan and a minimum starting price of 220,200 yuan;

Not only fuel vehicles, Mercedes-Benz's electric models have also joined the ranks of terminal price reductions. In the Autohome Fuzhou Preferential Promotion Channel, Mercedes-Benz EQS SUV is carrying out preferential activities, and consumers can enjoy a discount of up to 200,000 yuan in Fuzhou, with a minimum starting price of 710,500 yuan.

Choosing to cut prices is essentially a compromise with the market, and in the era of brutal electrification, by unleashing some brand premium power to keep more of the market. Last year, Mercedes-Benz delivered about 765,000 new vehicles in China, which is basically the same as the delivery level in 2022.

However, looking at the entire Chinese auto market, most brands are fighting a "price war", and the BMW terminal next door also has a lot of profits. In the first quarter of the sales are already a little weak, this year's Mercedes-Benz blockbuster promotion can still work, I am afraid to put a question mark.

3

It's not easy to catch up●

Although the start was unfavorable, Mercedes-Benz is still optimistic about this year's global auto market and Chinese market sales, saying that after the first quarter of the sales trough, the second quarter will usher in a rebound in sales, the global auto market sales are expected to increase slightly compared with last year, and the sales in the Chinese market are also expected to increase slightly.

Mercedes-Benz's confidence comes from the fact that it expects to launch 15 new models in China this year. In addition, Mercedes-Benz has obtained a road test license for conditional autonomous driving (Level 3) highways in Beijing. In addition, Mercedes-Benz has launched the first stations of the Supercharger network in China, the United States and Germany.

At the recently concluded 2024 Beijing International Auto Show, Mercedes-Benz also brought 21 blockbuster models, covering a variety of drive modes and various market segments, including the world premiere of the all-new Mercedes-Benz all-electric G-Class off-road vehicle.

At the same time, at the auto show press conference, the Mercedes-Benz CLA-Class Concept Car showcased the electrification and digital technology innovation of the Mercedes-Benz Modular Architecture (MMA) platform and the self-developed new architecture MB.OS operating system, which marks the next step towards an electric future.

It is not difficult to see that Mercedes-Benz is determined to pursue the steady development of its business in China in the future. However, from the perspective of electrification, it is very difficult for the "latecomer" Mercedes-Benz to catch up in the Chinese market.

In the view of "Rim Visibility", domestic independent brands have pulled the involution to a new height, redefined the high-end cars in the new energy era, and successfully entered the range of BBA, occupying all the selling points that can be thought of, leaving really little room for Mercedes-Benz.

At least this year, it will not be easy for its electric vehicle sales to make a big breakthrough. The newly released pure electric G-class off-road vehicle, from its positioning, will not play a big role in boosting the market size of Mercedes-Benz electric vehicles.

What's more worrying is that Mercedes-Benz also has a lot of pressure on the basic market of fuel vehicles, not only need to rely on price cuts to ensure sales, but also the reputation and value of luxury are also being tested.

In April this year, a total of 8 passenger car recall announcements were issued in China, involving a total of 216,700 passenger cars from 8 brands. Among them, Mercedes-Benz led the way with a recall scale of 92,500 units. From January to April, Mercedes-Benz issued 1-2 recall announcements every month, with a total of more than 730,000 recalled vehicles, and the models involved were basically fuel vehicles.

Such a large-scale recall does not seem to be in line with Mercedes-Benz's high-end image, which has been called the "king of recalls" for many years in the Chinese market because of the high number of recalls, and this year it seems to be playing a stable role.

Therefore, on the whole, although Mercedes-Benz officials are still optimistic about the overall performance of the Chinese market this year, it can be described as difficult in the face of the flag of "slight growth".

Author | Dugo

来源 | 车圈能见度（CarVisibility）

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