January 12, 2016 - 9:21 pm ET
DETROIT -- If Daimler AG's Mercedes-Benz arm overtakes BMW AG as the world’s top-selling luxury automaker, it may have to thank Hubertus Troska for his efforts.
Troska is Daimler’s board member in charge of operations in China, where Mercedes-Benz sales soared 33 percent last year to 373,459 vehicles.
The growth at Mercedes easily outpaced China’s top-selling luxury brand, Audi, which suffered a sales decline of 1.4 percent to 578,932 vehicles. BMW deliveries edged up only 1.7 percent to 463,736 vehicles.
BMW, in a statement Jan. 11, noted that “significant headwinds have impacted on the entire luxury sector” in China, and some analysts have warned that China’s economy may stagnate.
But others insist that the party isn’t over. On Tuesday, the China Association of Automobile Manufacturers predicted industry sales would grow 6 percent to 26 million vehicles in 2016.
At a Monday interview at the Detroit auto show, Troska did not disclose Mercedes’ sales target for 2016. But he added: “I have no reason to believe the momentum isn’t there.”
Mercedes’ turnaround in China dates back to 2012, when Troska -- executive vice president of Mercedes’ truck unit in Europe -- was promoted to Daimler’s board of management.
Since Troska was the only board member responsible for an individual country, the appointment underlined China’s importance to Daimler. At the time, Daimler was struggling in China despite a booming auto market.
The automaker had separate dealer networks, one selling imported Mercedes models, and another selling locally built cars and trucks, and those two organizations frequently clashed. To make matters worse, Daimler had no dealerships in 60 cities where BMW and Audi had stores.
In 2013, Troska merged Daimler’s two distribution channels, and he started adding dealerships. Over the past three years, the company has opened nearly 200 dealerships, expanding its Chinese network to 500 stores.
Mercedes has closed the dealership gap with Audi and BMW, Troska said, but he acknowledged that the new dealers have less experience. So he’s fixing that, too -- Mercedes has opened dealer training facilities in Beijing, Shanghai and Chengdu.
To drive down costs, Mercedes also has built an engine plant in China, and it added the C-class sedan to its portfolio of Chinese-produced models.
The company also has updated its product portfolio, adding the GLE, a combination of a crossover and sports coupe aimed at competing with BMW’s X6. This autumn Mercedes will launch the redesigned E-class sedan in the Chinese market.
With a unified distribution channel, a growing model lineup and an expanded dealership network, Mercedes’ biggest challenge in China may be the economy’s uncertain prospects. But Troska says he isn’t worried.
“People constantly ask me: ‘Is there going to be a hard landing? Is China going to fall into a black hole?’ And I tell them that I don’t see that. The fundamentals for the industry are good.”
You can reach David Sedgwick at [email protected].
