Mercedes lags in China as Audi, BMW hit the throttle

DHAKA: When shopping for a new car last year, James Zhang considered a Mercedes and a BMW, then settled on Audi’s Q7 sport-utility vehicle because he said it suited his status.

‘Audi makes people look mature and it’s more low-key’, said the construction-company executive from the Chinese port city of Tianjin, reports Bloomberg.

‘If you drive a Benz or BMW, people may think you are one of those showy nouveau riche.’

After opening its first Chinese factory in 2006, Mercedes charged out of the gate and quickly won 22 percent of China’s luxury market.

For the past two years, the company has been in a funk. Mercedes’s share today stands at 21 percent, versus 32 percent for Audi AG (NSU) and 23 percent for Bayerische Motoren Werke AG (BMW), according to researcher LMC Automotive Ltd.

‘I have the impression VW and BMW have put China as top priority and will for the next five to ten years’, said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler, who has a sell rating on shares of Mercedes’ parent, Daimler AG. (DAI) ‘It’s not the impression I get at Daimler’.

In the midsize segment, China’s most popular luxury-vehicle category, deliveries of Mercedes E-Class sedans have tumbled 23 percent to 16,111 in the first five months of the year, according to data compiled by LMC.

By comparison, sales of the competing Audi A6L have climbed 44 percent to 58,127 and BMW’s 5-series has gained 44 percent to 39,973.

Mercedes says the underperformance is temporary.

The company is retooling its Chinese facilities for new models and a bottleneck in the production of the B-Class compact has limited deliveries.

BDST: 1400 HRS, JUL 3, 2012

Edited by Robab Rosan, Cultural Affairs Editor