Tags: Daimler | China | Europe | DAI

Daimler Eye On China As Europe Sales Fall

By    |   Monday, 14 Nov 2011 01:02 PM

That sales should fall in Europe for luxury cars, like the Mercedes for which Daimler (DAI) is well known, should come as no surprise. Perhaps, too, it’s no revelation that the company is looking toward China rather than the domestic German market.

For the past several years, China has been a key figure in Daimler’s plans both as a future market as well as a production partner. This summer Chinese Premier Wen Jiabao and German Chancellor Angela Merkel witnessed the signing of the creation of Beijing Benz Automotive, a $2.75 billion joint venture between Daimler and its Chinese partner Beijing
Automotive Group.

Together they agreed to invest in an R&D plant, an engine facility to open in 2013 and joint production of Mercedes-Benz C-Class and E-Class sedans that will be expanded to include the GLK compact SUV as of 2011, as well as three models of the new generation of Mercedes-Benz premium compact cars.

In early November, that partnership was strengthened with a letter of intent to evaluate additional initiatives at the corporate level as well as to support each other with further investments.

They will jointly analyze the possibilities of technological cooperation, as well as cooperation in the field of research and development of new energy vehicles. The aim is to further improve the competitiveness of both partners in China.

New energy vehicles, for the Chinese market at least, are all the rage for Daimler. This summer the drawings of the electric vehicle under development with Chinese battery and car producer BYD (a Warren Buffett investment) grabbed a lot of headlines, partly because the design is so traditional rather than futuristic and partly because the companies don’t plan to market the car outside China. It should be launched in 2013.

Focus on trucks

Since Europe’s appetite for luxury cars has fallen, the focus will now shift to trucks, where the company sees more potential. In the third quarter reporting in late October, the company said that Trucks Europe/Latin America increased its unit sales by 21 percent to 43,000 vehicles.

In the medium and heavy-duty truck segments, Daimler Trucks is the market leader in Western Europe and Turkey, while in the NAFTA region it leads in Classes 6 and 8.

Cars shouldn’t be forgotten, however. The new M-Class and B-Class are set for launch in November, which may explain lower sales, as those customers who would want to buy in were probably waiting for the new model.

Daimler next reports on Feb. 22.

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That sales should fall in Europe for luxury cars, like the Mercedes for which Daimler (DAI) is well known, should come as no surprise. Perhaps, too, it s no revelation that the company is looking toward China rather than the domestic German market. For the past several...
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