Mercedes-Benz commercial vehicles can hardly take a step

Although commercial vehicles have historically held a significant share of the Chinese automobile market, their dominance has been closely matched by that of passenger cars. As overall vehicle sales in China continue to rise, the commercial vehicle segment remains highly attractive to global automotive giants. Companies like General Motors, Ford, and Volkswagen increasingly rely on their Chinese operations to support global growth. Consequently, any multinational commercial vehicle company that fails to establish a strong presence in China risks falling behind in the global competition. Daimler Group, one of the world’s leading commercial vehicle manufacturers, has long prided itself on its extensive product range, high sales volume, and strong brand reputation. However, its performance in the Chinese market has not lived up to expectations. While companies like Iveco have successfully adapted to the local environment, Daimler has struggled to gain traction. Iveco has deepened its domestic production and is now pursuing a more proactive and strategic approach, collaborating with partners such as Yuejin Group and Hongyan (now under SAIC) to expand its market share. Meanwhile, independent brands and joint ventures are actively exploring international markets, and even German companies like Mann have seen success through component and technology partnerships with Chinese automakers. Several international suppliers, including Cummins and Allison Transmission, have achieved considerable success in China, with their Chinese operations contributing significantly to their global performance. This highlights the importance of adapting to the Chinese market, where local policies, consumer preferences, and competitive dynamics play a critical role. Despite its long-term presence in China, Daimler has failed to fully capitalize on the opportunities available. Its Beijing-Benz joint venture for passenger cars has underperformed, and its light-vehicle project with Southeast Automotive, though modest in scale, has had limited impact on its overall profitability. The real test for Daimler lies in its heavy truck and bus segments, but so far, its efforts in these areas have been disappointing. The North Mercedes-Benz heavy truck project was short-lived, and the withdrawal from the Yaxing Mercedes-Benz bus joint venture further weakened its position. Domestic bus manufacturers have grown stronger, making it difficult for Daimler to re-enter the market. Daimler's attempts to form a partnership with FAW Group for medium-heavy trucks also ended without success, as FAW refused to compromise on brand control. This loss of opportunity has left Daimler struggling to compete with domestic leaders like Dongfeng and SAIC. To make a meaningful impact in China, Daimler must focus on its heavy-duty truck projects. However, unlike companies such as German Mann, which have found ways to be more flexible and profitable, Daimler has faced challenges in aligning its strategies with local conditions. Recently, Daimler chose to base its passenger car operations in Beijing and established its Northeast Asia regional headquarters there. It also sought a partnership with Beijing Foton Motor to develop a complete truck production line. Yet, this collaboration has not gone smoothly. Beijing-Benz's sales have lagged behind those of Audi and BMW, and the joint venture with Foton has encountered numerous obstacles. Daimler's attempt to acquire a 24% stake in Foton through a private placement was met with resistance from shareholders due to rising stock prices. The process has been delayed, and approval from key regulatory bodies like the NDRC remains uncertain. Fotian, having rapidly developed into China's largest commercial vehicle manufacturer, now holds a much stronger position than FAW did a decade ago. This shift in power makes it difficult for Daimler to negotiate favorable terms. The future of the joint venture between Daimler and Fotian will depend on whether both sides can agree on key issues such as equity ratios, brand usage, and export strategies. Historically, successful joint ventures in China require timely execution and flexibility. Daimler's missed opportunities have cost it dearly, and catching up is becoming increasingly difficult. While some media attribute Daimler's struggles to arrogance, the deeper issue lies in corporate culture and strategic thinking. As a global leader in commercial vehicles, Daimler must learn to adapt to different markets and cultures. The success of Guangzhou Honda, for instance, was driven by its ability to respect and integrate into Chinese business practices. In a rapidly evolving market like China, it is no longer enough to rely solely on brand strength or technological superiority. Companies must also build strong relationships with local partners and understand the rules of the game—survival of the fittest. For Daimler, it may be time to rethink its approach and learn from companies like GM, which have successfully navigated the Chinese market. Only then can it hope to regain its footing and secure a stronger position in one of the world's most important automotive markets.

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