Daimler AG to strengthen R&D in China

Daimler AG has vowed to beef up its research and development capability in China in a bid to align its premium passenger car brand Mercedes-Benz to the changing tastes of wealthy Chinese and catch up with major rivals Audi AG and BMW AG in the Chinese market.

Dieter Zetsche, chairman of the German group and head of Mercedes-Benz Cars, said at the company's annual news conference in Stuttgart on Thursday that it is intensifying its development activities in China, where the brand lags far behind Audi and BMW in terms of sales.

"China will play a key role in our product development process in the future," Zetsche said.

He said Daimler will have around 500 "highly qualified" engineers and designers in China by the end of this year.

Last November, the group opened a research and development center, including a design studio, in Beijing with a total investment of 865 million yuan ($140 million).

"We are massively expanding our local production in China. Our plan for the next few years calls for two-thirds of the vehicles we sell in China to be manufactured there as well," he stressed.

At the news conference, Zetsche introduced a show car - Mercedes-Benz's new G-Code sports utility coupe concept, which was designed at the studio in Beijing.

Last year, Mercedes-Benz sales in China surged by 29 percent to 281,588 units, with 55 percent built locally.

While, the China sales of Audi were 575,077 and BMW sold 425,765 units.

Zetsche said Mercedes-Benz will continue to enjoy double-digit growth in China this year and sales will be "well over" 300,000 vehicles.

"I think it's clear to everyone that China isn't just any market for us. It is the market that will determine who comes out on top in the premium segment. And Mercedes-Benz still has plenty of room to grow in China," he said.

Daimler's joint venture with China's BAIC Group in Beijing now produces the Mercedes-Benz E-Class and C-Class sedans as well as the GLK mid-sized SUV.

A China sales executive of Mercedes-Benz revealed earlier this month that the brand will introduced more than 15 new products in the market, including a GLA SUV built at the joint venture.

Zetsche also said Daimler will expand its financing activities in China to accommodate the growing number of customers who use its services to finance their car purchases.

The group plans to increase the equity base of its financing activities in China by half a billion euros, he added.

Zetsche said the investment in Daimler's R&D centers worldwide will focus on new skills to reduce fuel consumption, as future markets are likely to have strict emissions regulations.

And, between now and 2017, Daimler will launch 10 plug-in hybrids, one new model every four months on average, according to the company.

With record unit annual sales of more than 2.5 million vehicles, Daimler AG's revenue in 2014 increased by 10 percent year-on-year to 129.9 billion euros ($1.49 billion).

The group's earnings before interest and tax, of 10.8 billion euros, remained at the level of the previous year. Net profit for the year 2014 totaled 7.3 billion euros.

duxiaoying1@chinadaily.com.cn

(China Daily 02/09/2015 page18)