When Daimler decided to post a board member to Beijing for the first time, it did so with a simple mandate: repair long-running operational problems at the German company’s Mercedes-Benz unit in China and close the gap with BMW and Volkswagen’s Audi.
That task, however, has been complicated by an investigation into automotive pricing practices by the National Development and Reform Commission, one of the three government agencies that enforces China’s 2008 anti-monopoly law. The probe has ensnared Mercedes, BMW and market leader Audi to varying degrees, and injected a new risk factor into the sales battle between the big three luxury automakers.
While these three German companies dominate luxury sedan sales in the world’s largest car market with a combined segment share of 80 per cent, Mercedes has been the laggard. Hubertus Troska, who took over as chairman and chief executive of Daimler’s China operations last year, and Nicholas Speeks, head of its Mercedes unit in the country, set about unifying a fragmented dealership structure and investing in its manufacturing joint venture with state-owned carmaker BAIC Motor.
