Automotive News - 2008 Guide to China's Auto Market - (Page 8)

8 GLOBAL AUTOMAKERS/JOINT VENTURES DaimlerChrysler China Ltd. 1/23F Landmark Tower, No. 8 N. Dongsanhuan Road Chaoyang District, Beijing 100004, P.R. China (86) 10-6590-6668, www.daimlerchrysler.com.cn Top executive: Ulrich Walker, DCNEA chairman & CEO JV: Beijing Benz-DaimlerChrysler Automotive Co. No. 8 Boxing Road, Beijing Economic-Tech Area Beijing 100176, P.R.China (86) 10-6782-4888, www.bbdc.com.cn Top executive: Guenter Butschek, president & CEO Daimler AG struggled in China in 2007. The luxury market was hot, but sales of Daimler’s only domestically produced model, the Mercedes-Benz E class, were modest. Chinese consumers flocked to domestically produced BMW and Audi sedans at the low end of the segment and imported Lexus vehicles at the high end. Stuck in the middle, Mercedes faced a tough market for the E class, which sold 6,882 units in 2007. By contrast, Audi A6 sales reached 72,638 last year. Sales of locally produced Mercedes C-class cars began in March, but that model will face the same problems. The luxury segment in China is competitive. BMW produces its 3 and 5 series locally — the 5 series is a stretch version for China’s chauffeur-driven passengers. The Toyota Crown and a stretch version of the Audi A6 sedan also are produced locally. Imports were Mercedes’ strong point in 2007, but there, too, the competition was stiff. Mercedes sold 11,500 imported 2007 2006 MERCEDES E CLASS S-class sedans in China, including Hong Kong and Macao. It sold 3,000 imported SUVs. The imported Mercedes S350 has a rearseat entertainment system customized for China’s chauffeur-driven passengers. But the S class was eclipsed by Toyota’s Lexus brand in 2007 and will continue to be Models produced: Jeep 2500/2700; Mitsubishi Outlander; Chrysler 300C; Mercedes-Benz E class overshadowed in 2008. Lexus sells three sedans in China and launched the imported LX 570 SUV in January. The Lexus is the car of choice for rich Chinese businessmen, says an executive at a U.S. consulting firm. Lexus’ strong point: The buying experience, the consultant says. Lexus’ 39 dealerships know how to make customers feel they are buying luxury items. In 2008, Daimler will be busy trying to separate itself from Chrysler LLC in China. The two parted ways in 2007, but they share a manufacturing site, an office and a marketing staff in China, so separation is complicated. On the marketing side, Mercedes must figure out how to trump that Lexus experience so S-class sales can grow strongly. And it must figure out how to make its locally produced models more attractive than a BMW or an Audi. — Alysha Webb Ownership: Beijing Automotive Industry Holding Corp. DaimlerChrysler AG (DCAG) DaimlerChrysler (China) Limited (DCCL) 50.4% 37.2% 12.4% Capacity Production Unit sales 100,000 20,236 19,730 100,000 18,726 21,308 Chrysler LLC Asia Operations 1/23F Landmark Tower, No. 8 N. Dongsanhuan Road Chaoyang District, Beijing 100004, P.R. China (86) 10-6590-6668, www.chrysler.com.cn Top executive: Philip Murtaugh, CEO Expanding Chrysler LLC’s tiny presence in China will be a tough job for Phil Murtaugh, the head of Chrysler’s Asian operations. In the future, China may be more important to Chrysler as a production base for small cars than as a market. Chrysler took steps to make that a reality in 2007. Murtaugh in September was hired away from a job supervising overseas operations for Shanghai Automotive Industry Corp. Well connected in China, he formerly was head of General Motors’ China operations. In 2007, Chrysler produced only one car model in China, the 300C sedan. It sold 7,743 units. The Dodge brand was introduced in China in November 2007 with the launch of the Caravan van. The Chrysler Grand Voyager van was launched in China a few months earlier. Both are being produced under license at Southeast Motor Co. In 2007, Chrysler moved closer to 2008 GUIDE TO CHINA’S AUTO MARKET CHRYSLER GRAND VOYAGER completing an agreement with Chery Automobile Co. to produce small cars for export. The two sides signed a memorandum of understanding in July. A final agreement had not yet been signed as of early March. When the agreement is signed, reports say the two will start by exporting a version of an existing Chery model to markets in Latin America. The car’s exterior will be restyled to give it a Chrysler look, industry sources say. Exports to Latin America are expected to begin in 2008. Exports to the United States won’t begin until at least 2009. Chrysler stopped producing Jeep models in China in 2007. The Jeep brand now relies on imports. This is a crucial year for Chrysler in China. Murtaugh must create consumer interest in the Chrysler brand and further introduce the Dodge brand into China’s hypercompetitive market. In early 2008, the automaker added the Chrysler Sebring sedan to its domestic production lineup. Chrysler also began importing the Dodge Avenger and Dodge Caliber sedans in early 2008. In 2008, Chrysler also must work out its relationship with its former owner, Daimler AG, in China. The two share a paint shop at Beijing Benz-DaimlerChrysler Automotive Co. and numerous executives. As of early March, the separation was still being worked out. — Alysha Webb Automotive News • J.D. Power and Associates • Automotive Resources Asia http://www.daimlerchrysler.com.cn http://www.daimlerchrysler.com.cn http://www.bbdc.com.cn http://www.chrysler.com.cn http://www.chrysler.com.cn

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