AsianFin -- Mercedes-Benz is holding firm to its premium pricing strategy in China, even as intensifying competition and a bruising price war erode market share in the world’s largest auto market.
Mercedes-Benz CEO Ola Källenius said the company would not abandon its “value over volume” approach, stressing that brand strength and margins take precedence over chasing sales numbers.
The German luxury automaker unveiled its new electric GLC SUV on Sunday, a model Källenius said will be critical to restoring momentum in China.
“This is going to hit the nail on the head in terms of what Chinese Mercedes customers are looking for,” he said. “And yes, we charge a little bit more. But GLC fans can rest assured … from a pricing point of view, if you’re currently a GLC customer, you will also feel at home with this new electric GLC.”
Mercedes-Benz, like rival Porsche, has resisted slashing prices to keep pace with Chinese competitors, focusing instead on protecting profitability. That strategy has come at a cost: the company reported a 19% drop in second-quarter sales in China, to 140,400 vehicles.
China’s auto market has become increasingly challenging for foreign brands as local manufacturers roll out cheaper electric vehicles that appeal to cost-sensitive buyers. Tesla, BYD, and other Chinese automakers have led a wave of price cuts since early 2023, reshaping the competitive landscape.
Still, Källenius emphasized that Mercedes-Benz remains committed to its positioning as a premium brand. “We will not change our strategy in China,” he said. “We will maintain our premium approach.”
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