Daimler opens Beijing R&D centre to tune Mercedes-Benz to Chinese tastes

Mon Nov 3, 2014 6:57am EST
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By Norihiko Shirouzu

BEIJING (Reuters) - Daimler AG (DAIGn.DE: Quote) has opened a research and development (R&D) centre in Beijing tasked with further tuning its Mercedes-Benz brand to wealthy Chinese tastes and closing the sales gap with Audi AG (NSUG.DE: Quote) and BMW AG (BMWG.DE: Quote).

The German auto maker's move demonstrates a desire to "embed us more deeply in China, to make cars best suited to China," Hubertus Troska, Daimler's China head, told Reuters.

Daimler is expanding its Mercedes-Benz brand in China at a time when an investigation into anti-competitive practices in the auto industry is prompting car makers to lower prices. Mercedes-Benz itself has previously said it was co-operating with an investigation into unspecified matters.

The new R&D centre nevertheless signals commitment to a market Troska said would become Mercedes-Benz's largest in as early as one or two years. With that in mind, the automaker plans to raise the number of Mercedes-Benz engineers and other specialists in Beijing to 500 by the end of next year from 350.

"It is a logical step to better understand the market and make sure Chinese requirements are properly regarded early in the process when we develop a next generation of cars," Troska said in an interview last week.

The R&D centre caps a series of moves Troska has made since becoming China head in 2012, including reforming marketing and sales and raising dealer numbers. Its focus on Chinese tastes should help Mercedes-Benz catch up in the local luxury car segment with Volkswagen AG's (VOWG_p.DE: Quote) Audi and BMW, he said.

Researcher LMC Automotive projects Mercedes-Benz to sell 291,000 vehicles in China this year, compared with 581,000 for luxury market-leader Audi and 448,000 for second-placed BMW.

Troska said new models such as the GLA compact SUV should help Mercedes-Benz sell "significantly more than 300,000 units next year." LMC Automotive puts Mercedes-Benz's 2015 sales at 386,000 vehicles.   Continued...

Hubertus Troska, chairman and chief executive officer of Daimler Greater China, introduces Mercedes-Benz's new Sport Utility Coupe concept car G-Code at its unveiling event during the opening ceremony of the company's Mercedes-Benz research and development (R&D) centre in Beijing November 3, 2014.   REUTERS/Kim Kyung-Hoon