GreenergyDaily

Sep. 8, 2025

German luxury automaker Mercedes-Benz is sticking with its premium strategy in its main market China, where a brutal pricing war has cost the group market share as local customers increasingly switch to cheaper domestic models.

CEO Ola Kaellenius, speaking to Reuters ahead of the IAA auto show in Munich, said the new electric GLC SUV - which Mercedes-Benz unveiled on Sunday - would be instrumental in recovering lost ground in the world's largest auto market.

"This is going to hit the nail on the head in terms of what Chinese Mercedes customers are looking for," Kaellenius said.

"And yes, we charge a little bit more. But GLC fans can rest assured ... from a pricing point of view, if you're currently a GLC customer, you will also feel at home with this new electric GLC."

Like Porsche, Mercedes-Benz has been protecting margins at the expense of market share in China, where it suffered a 19% decline in vehicle sales to 140,400 in the second quarter of 2025.

Kaellenius said the company would not change its strategy in China and would maintain its premium approach.

Mercedes-Benz does not need to fear Chinese competition on electric vehicles but the German carmaker is working to reduce costs amid a price battle there, chief technology officer Markus Schaefer said in Munich on Monday.

"We have worked our way to the top in the area of electromobility, so we don't need to be afraid of China," Schaefer said after the launch of Mercedes' electic GLC SUV at the IAA motor show.

Mercedes is working hard with its Chinese development team to improve costs, he added.