China: BMW worried, Daimler bullish about sales prospects image

The world’s largest auto market is starting to lose its rosy appearance as the country’s economy slowed to the lowest growth since 1990 and the automakers, on full expansion mode, were greeted by dissatisfied dealers when the full year tally was due.

Recently, BMW, the world’s largest premium automaker, has hinted towards a more cautious approach surrounding its Chinese strategy for 2015, especially since foreign brands have been called upon by the state-backed China Automobile Dealers Association (CADA) to support the sales networks when profits fall. The automaker even reportedly pledged in an unprecedented step no less than 5.1 billion yuan ($820 million) to its dealers. But Daimler Chief Executive Officer Dieter Zetsche said on the sidelines of the Detroit motor show that Mercedes-Benz sees no worries for the year ahead – with no signs that its brand could slump in China.

Both Daimler and BMW have forecasted better sales this year, even as they separately reported their best yearly sales last year, also buoyed by strong demand in China. But luxury and mass-market carmakers are worried that the pace of auto sales in China could slow down even further after overall deliveries dropped to a 75 growth last year following many years of double-digit sales increases. “I’m not seeing that brutal slowdown of growth. I see a pretty stable economic development,” commented Zetsche about the situation in China. He added that worries about the Chinese sales crashing down have been around for a decade by now, and Mercedes-Benz still experiences “very strong dynamics in the market,” with high demand for the company’s S-Class and E-Class series.

Via Reuters