FRANKFURT (Reuters) -- Daimler CEO Dieter Zetsche says the Mercedes-Benz brand will not sacrifice profit margins in its quest to overtake rival BMW and become the best-selling luxury car brand globally.
Zetsche has tasked Mercedes with becoming the leading premium carmaker by 2020 after it sold 1.87 million cars in 2015, leapfrogging Volkswagen Group's Audi on 1.80 million, but still trailing the BMW brand on 1.91 million.
"The volume lead should be the consequence of having the best offering," Zetsche said. "If we accomplish this, it is a natural consequence that more people will choose us."
"People said it [increased volume] will create pricing and margin pressure. Exactly the opposite is true," Zetsche told analysts at a conference to discuss fourth-quarter results in Stuttgart on Friday.
Having a certain level of sales volume gave Mercedes the economies of scale to develop a coupe, a convertible and long-wheelbase version of its top-of-the range S class, Zetsche said.
Zetsche was more upbeat about the brand's prospects in China, given that the overall market is expected to grow just 8 percent this year.
"We do see significantly better chances for us based on our product offerings," Zetsche said. Demand remained high for some new locally made cars, such as the GLC SUV, he said.
"We have waiting times which are unhealthy already," he told analysts, adding that the new E class, another volume model, had yet to hit showrooms.
Despite a new BMW 7-series model to challenge the S class, there has been no dent in China sales, Zetsche said.
"Competitors come up with good cars, we do not see our singular position with the S class challenged with that."
Demand for Mercedes cars continued in January, monthly sales figures showed, with global deliveries up 20 percent, boosted by a 52 percent jump in China sales.