Mercedes Car Sales Create New Record in China

The Mercedes-Benz cars manufacturer Daimler had released its third quarter report for record sales and revenues.  The car cited strong progress in Western Europe which is its biggest market, but its feat was surpassed by the sales it made in China.

The sales of these prestigious cars in China were up 39% in the quarter, despite the downshift in the world's second biggest economy and a serious effort to punish those government officials who engaged on extravagant spending, as reported by CNN Money.

Tim Urquhart, automotive analyst at HIS described the rich automaker's success in China was "spectacular".  It was helped by the strong growth in compact car sales, and may also have a portion from the market share from rivals like BMW and Audi, including Volkswagen that is facing many issues regarding its emission scandal.

"The [Mercedes] S-Class remains the pre-eminent automotive status symbol in China," Urquhart said.

Daimler's total incomes were up 13% in Q3, as compared to the same period last year, with the carmaker selling 720,000 vehicles worldwide.  Just half a million of those were Mercedes cars.  Its goal is to become the world's second-largest luxury carmaker this year.  It is prepared to overtake Audi when it comes to sales and has market leader BMW in its sights.

"We will do everything to put Daimler into the leading position," said Daimler CEO Dieter Zetsche.

However, these good times will not linger as Daimler is expecting a "significant contraction of the market it addresses in China."  China's economy has just posted its weakest quarter of growth since the worldwide financial crisis where the slowdown and a government anti-corruption campaign have hit luxury spending in recent months.

The strong growth in Chinese deliveries is expected by Daimler to continue in the fourth quarter and cites a chance for more volume growth in the largest auto market in 2016, said Bodo Uebber, finance chief.

According to ETAuto.com, this sales momentum of Mercedes-Benz premium division will prolong in the October-December period, Uebber said during an earnings call on Thursday.  This is the first time in six months in September that the Chinese market grew.

New innovations have spurred Daimler's luxury car sales worldwide to record levels this year, declining Volkswagen Audi but still behind BMW.  Mercedes-Benz launched the redesigned A-Class compact car and the GLC and GLE sport-utility vehicles (SUVs) in September.  Its sales in China leapt to 53% in that month while Audi's sales in the country increased to 2.9%.

"There's a growing middle class in China which is hugely attracted by compact SUVs. The SUV trend has extended into luxury segments over the past years and there is strong potential going forward," said Stefan Bratzel, head of the Center of Automotive Management think-tank near Cologne.

Mercedes has lessened the sales gap with Audi and BMW this year and is expecting for a strong demand to continue in the fourth quarter of 2016.