The premium urban car brand smart on display at the 2010 Chengdu Motor Show. Provided to China Daily
BEIJING -While Western economies are still grappling with economic recovery, a study released by Bain & Company last week showed that China's consumer luxury goods market is outpacing every other luxury market in the world, with a projected growth of 23 percent this year.
Another report, from the Chinese Academy of Social Sciences earlier this year, forecasted that by 2015, China will become the No 1 market for luxury goods, with annual sales of $14.6 billion. Currently, it trails only Japan.
The premium car market remains one of the most important for all major industry players - as a result, competition has become extremely fierce, with all leading manufacturers following aggressive sales and marketing initiatives.
Within the last few months, the biggest players have all released statements, marking milestones for each company.
At the end of September, Mercedes-Benz announced an unprecedented explosion in sales, having already surpassed its annual forecast. A further announcement in October said China would be its No 1 market by 2015.
The same month, Audi saw its millionth car roll off the production line, having already enjoyed a 22-year presence in the China market, with a further million predicted sales by 2013.
In November, BMW released news that within the next 5 to 10 years, China will be its largest market globally.
With such a dynamic market in China, having the right strategy in place is key, believes Klaus Maier, president and CEO of Mercedes-Benz (China) Ltd.
"Our record sales of over 115,330 units and our high growth rate of 128 percent in the first 10 month of this year shows our continuous high sales momentum month over month. This is a reflection of the appreciation of our customers for our dynamic and exclusive brand, our fascinating cars and the first class service of our dealers," he said.
Maier attributed this rapid growth partially to the diversification of Mercedes-Benz's product portfolio, especially with the introduction over the past few years of "younger" Mercedes-Benz models, such as smart, C-Class Estate, GLK-Class, B-Class and C-Class.
"Different demographic sectors have different lifestyles and, therefore, different demands - we have found that our younger customers tend to want luxury, not necessarily in the bigger traditional sense, but in terms of practicality, comfort and safety," he said.
This trend is now being borne out by sales, with "young" products accounting for approximately 40 percent of the automaker's overall sales to date this year. In fact, with ever-increasing monthly sales, October saw the best performance yet for smart in China.
"With nearly 1,000 units sold, we saw an impressive 179 percent year-on-year growth for smart in the first 10 months of this year," said Bjeorn Hauber, executive vice-president of Sales & Marketing of Mercedes-Benz (China) Ltd.
This may, in part, have been aided by an innovative sales strategy adapted to suit the fast-changing, modern environment of the Chinese market.
These sales figures are set to be further strengthened by the imminent introduction of the A-Class this month, which, according to Maier, has witnessed strong pre-sales orders.
"With the arrival of the A-Class in China, the full Mercedes-Benz product line-up will be available here, broadening our image in the market and allowing us to reach an even wider customer base," he said. "This is part of our ongoing commitment to China," he added.
And in terms of commitment, Mercedes-Benz intends to be in China for the long-term.
Last month saw the lighting ceremony of the Mercedes-Benz three-pointed star atop the Daimler Tower in Beijing, presided over by Dr Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.
During his visit, which was his third to China in this year alone, Zetsche underlined the company's commitment to the market by announcing a 3 billion Euro investment together with the Chinese partners over the next few years, which includes the establishment of a Mercedes-Benz Design Center, R&D centers, and an engine plant.
"Daimler's success this year in China has truly been unprecedented - as the only luxury automaker to have full market segment penetration, our Passenger Cars, Trucks, Financial Services and Daimler Parts business have all achieved outstanding performance, " said Ulrich Walker, chairman & CEO of Daimler Northeast Asia.
"We have the confidence to remain as the fastest-growing premium auto brand by continuously taking note of the market trends in the future."
Understanding the market, offering the right products and looking at new avenues for sales and marketing initiatives appears to be the secret of success for Mercedes-Benz. It is hardly surprising that they remain the fastest-growing carmaker within the premium segment.
China Daily
(China Daily 11/15/2010 page19)
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