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Mercedes-Benz fights back after 27% sales plunge in China’s brutal market

A 27% sales crash forces Mercedes-Benz to rethink its future in China. Can deeper local roots and cost cuts outmaneuver rivals like BYD?

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There is a vehicle which has mercedes benz logo on it is on the road and there is another vehicle...
There is a vehicle which has mercedes benz logo on it is on the road and there is another vehicle beside it.

Mercedes-Benz CEO: Competition in China Remains Tough - Mercedes-Benz fights back after 27% sales plunge in China’s brutal market

Mercedes-Benz is facing tough challenges in China, its biggest market. The company saw a sharp 27% drop in sales during the third quarter, with only 125,100 vehicles sold compared to the same period last year. Despite this, the brand remains determined to hold or even grow its share in an increasingly competitive environment.

China’s automotive sector is crowded, with around 100 manufacturers vying for dominance. However, CEO Ola Källenius predicts that only 30 to 40 of these will stay profitable in the long term. He described the market as fiercely competitive, with pressure on margins and rapid shifts in technology, particularly in software and connectivity.

To stay ahead, Mercedes-Benz plans to adopt a more localised approach. Källenius emphasised the need to become 'more Chinese,' focusing on products and strategies tailored specifically for the Chinese market. This shift aims to improve efficiency and cut costs while addressing the threat from aggressive pricing by domestic brands like BYD.

The next decade will bring further hurdles, including recovering lost market share and adapting to fast-changing consumer demands. Despite these obstacles, the company remains committed to maintaining its position in China, which remains its largest market ahead of Europe and North America.

Mercedes-Benz’s strategy now centres on deeper local integration to navigate China’s tough conditions. The brand’s third-quarter sales decline highlights the urgency of its plans. Success will depend on balancing cost control, innovation, and competition against well-established local rivals.

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