Competition in China will stay 'tough,' Mercedes-Benz boss says

Mercedes-Benz boss Ola Källenius said he expects conditions in China to remain difficult amid "incredibly intense" competition in the sector.

In the wake of the coronavirus pandemic, "the market dynamics are not quite as they have been for 15 or 20 years," Källenius told the Automobilwoche trade journal in an interview published on Thursday.

"This is coupled with incredibly intense competition. 100 automotive companies are vying for a market that can hold perhaps 30 to 40," he said.

A shakeout is imminent, but will take time, he predicted. "This means that this intense competition will continue for the next few years."

He said it was "absolutely possible" for the luxury carmaker to maintain or even expand its market share with the right product strategy and the right industrialization strategy.

"But we are not naive. We are realistic. The next few years in China will be tough," he said. Mercedes needs to be producing "in China for China," he said, partly in order to keep costs and efficiency.

China is the largest sales market for Mercedes-Benz, followed by Europe and North America. The manufacturer sold 125,100 vehicles in the country over the third quarter, a decline of 27% compared to the same period last year.