JV to drive Benz's expansion
By Jin Jing |
August 12, 2011, Friday
|
Print Edition
Print Edition
DAIMLER AG and China's Beijing Automotive Holding Group have agreed to set up a new joint venture in China to consolidate the distribution network of Mercedes-Benz models to help the premier car brand grow in the country.
Analysts said the move will help the premier car brand to fix its long-term internal competition of imported cars and localized models.
The new venture may be set up at the end of this year or early next year and will be responsible for sales, marketing and after-sales operations of Mercedes-Benz China and its Chinese venture Beijing Benz Automotive Co, the Beijing Times reported yesterday, citing Beijing Auto's Chairman Xu Heyi.
Xu said the venture seeks to ensure that Mercedes-Benz will have only "one network and one voice in China" in the future.
The problem facing the German luxury carmaker is internal competition resulting in its brand image being damaged and hurting the interests of dealers.
Mercedes-Benz China runs the imported business while Beijing Benz sells domestically-made cars under a separate strategy, which has curbed expansion in the market.
Last year, dealers of Mercedes-Benz China sharply cut prices of imported E-Class sedans, forcing the dealers of its Chinese-made E-Class sedans to do likewise.
"A more simple structure will make it easier for management and also good for dealership expansion in the future," said Yale Zhang, managing director of Automotive Foresight (Shanghai) Co.
Analysts said the move will help the premier car brand to fix its long-term internal competition of imported cars and localized models.
The new venture may be set up at the end of this year or early next year and will be responsible for sales, marketing and after-sales operations of Mercedes-Benz China and its Chinese venture Beijing Benz Automotive Co, the Beijing Times reported yesterday, citing Beijing Auto's Chairman Xu Heyi.
Xu said the venture seeks to ensure that Mercedes-Benz will have only "one network and one voice in China" in the future.
The problem facing the German luxury carmaker is internal competition resulting in its brand image being damaged and hurting the interests of dealers.
Mercedes-Benz China runs the imported business while Beijing Benz sells domestically-made cars under a separate strategy, which has curbed expansion in the market.
Last year, dealers of Mercedes-Benz China sharply cut prices of imported E-Class sedans, forcing the dealers of its Chinese-made E-Class sedans to do likewise.
"A more simple structure will make it easier for management and also good for dealership expansion in the future," said Yale Zhang, managing director of Automotive Foresight (Shanghai) Co.
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