AutoBeta(AutoBeta.net)09/07 Report--

In recent years, with the growing popularity of the domestic luxury brand market, its market share has also increased significantly, among which Mercedes-Benz became the best-selling luxury brand in China in the first half of this year. In this regard, Daimler Group recently said that in order to achieve the transfer of Mercedes-Benz business, it will reduce localization investment and accelerate the development of China at the same time.

According to foreign media reports, Ola Kallenius, CEO of Daimler Group, said a few days ago that as the group is currently facing a sharp decline in global car sales, in order to further cut costs, it will rule out the possibility of expanding production in China, thus transferring investment to China to help the rapid growth of the Chinese market.

The reason for such a move is that Mercedes-Benz's performance in China's luxury car market is getting better at a time when Daimler has to cut costs in the face of persistent net profit losses.

According to the overall sales performance of Mercedes-Benz at work this year, global sales fell 19% year-on-year to 870000 units, but the Chinese market has hit record highs for the same period since the second quarter. In the first half of the year, Beijing Mercedes-Benz not only outperformed the market, but also became the top seller of domestic luxury brands.

According to Daimler's previous second-quarter results, the group's revenue was 30.2 billion euros, down 29% from a year earlier, profit before interest and tax was negative 1.682 billion euros, adjusted profit before interest and tax was negative 708 million euros, and a net loss of 1.906 billion euros (a net loss of 1.242 billion euros in the same period in 2019). It means further expansion of profits.

On the other hand, thanks to the steady rebound in sales of Beijing Mercedes-Benz in China, its share of BAIC's revenue has increased again. According to the first-half results released by Beijing Auto, BAIC's cumulative revenue reached 77.854 billion yuan, down 11.6 percent from the same period last year, but Beijing Mercedes-Benz's related income reached 74.92 billion yuan, and its overall income rose to 96.2 percent. It can even be said that at the present stage, Beijing Automobile relies almost entirely on Beijing Mercedes-Benz for its revenue and profit sources.

Earlier, it was reported that Daimler hopes to become the second foreign-controlled luxury car company after brilliance BMW, increasing the proportion of rights issues, after all, the profits brought by Mercedes-Benz in the Chinese market are very attractive.

At the same time, Daimler has increased its cash flow reserves by increasing revenue and cutting expenditure due to the expansion of the group's second-quarter losses. According to previous reports, Daimler CEO Kang Linsong is leading the group to implement a restructuring plan, which plans to expand the number of layoffs from 10, 000 to 15000 in order to significantly reduce costs.

I have to say that for Daimler, in such a dilemma, on the one hand, it has suffered a huge loss in performance caused by the epidemic, and on the other hand, it has to invest more to speed up the transformation of enterprises to electrification and intelligence. how to maximize benefits is better than the current plan that Daimler needs to make.

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