- Mercedes-Benz to unveil new China Technical Center this month
- German automaker making China a ‘home away from home’
- Foreign automakers under pressure from Chinese startups
- Mercedes-Benz moves all its designers in China to Shanghai
BEIJING/SHANGHAI, Oct 11 (Businesshala) – Mercedes-Benz, the German company founded by motor car inventors, is pouring more resources into its cutting-edge research and design capabilities in China as the center of gravity of the new auto. The world moves east.
In a campaign to create a “home away from home,” Mercedes-Benz is doubling down on bases in Beijing and Shanghai to stay ahead of regulations and consumer trends in a car market that has toppled the United States and Germany combined.
Three years after announcing plans to strengthen its research and development (R&D) in the country, the Daimler (DAIGN.DE)-owned luxury car brand will unveil its new Tech Center China in Beijing this month.
Businesshala spoke to four people from the tech center and the brand’s Chinese design studio who are familiar with the company’s new China strategy. Everyone declined to be named as they are not allowed to speak to the media.
With 1,000 engineers, the new technical center is more than three times the size of Mercedes-Benz opened in 2014 and is the first outside Germany that can test “everything”, making it technically a far larger R&D. Keeps “on par” with Headquarters. near Stuttgart, said a person close to the center.
Mercedes-Benz has also invested heavily in upgrading its Chinese design studio and moved the entire team from Beijing to Shanghai, a metropolis of about 25 million people known as the car design capital of China. Is.
Mercedes-Benz has good reason to expand its Chinese operations.
Its car sales in China jumped 12% last year to a record high of 774,000, ahead of its next two markets, Germany at 286,000 and the United States with 275,000.
About 80% of the cars sold in China were also made there, usually with features and models from China only, and Asia accounted for about half of its global sales in 2021 overall.
China’s auto market, the largest in the world since 2009, is expected to grow steadily, with demand projected to reach 35 million vehicles by 2030, up from 25 million now.
But Mercedes-Benz, like all foreign automakers in China, is under pressure from local EV startups such as Xpeng, Li Auto and Nio (NIO.N) and their stylish vehicles with high-tech features tailored to Chinese consumers.
This is why the German carmaker’s “second home” strategy for China is focused on making its design and technology more agile, to respond quickly to the changing landscape and firmly establish the Mercedes-Benz brand. , said four sources.
Bill Rousseau, Head of Consultancy, said, “The expectations in China are for the in-car experience to be provided by the local digital services ecosystem, and such solutions should be conceived and built by people who live in China and in fact. I understand mobile internet.” Automobility Limited in Shanghai said.
Mercedes-Benz customers in China are on average 36 years older – almost 20 years younger than in Germany – and are more tech-savvy, but they are also notoriously treacherous, as trends change from one brand to another. In.
Mercedes has spent 1.1 billion yuan ($170 million) to upgrade the center, with most of the investment ensuring that it can perform an array of tests locally – rather than returning the new technologies to its Sindelfingen headquarters in Germany. can send.
“A key reason for the expansion is to achieve closerness to those customers and their needs,” said a person close to the tech center. “Here, we finally have everything we need to fully test the car,” said the source.
The centerpiece includes a modern chassis test bench and noise, vibration and stiffness as well as a battery and e-drive powertrain and has the flexibility to swap in new ones, as two sources said.
Mercedes has also added functions it deems important to Chinese customers, such as a team dedicated to intelligent, connected electric vehicle (EV) technology.
“Tech-savvy customers require that you be very local in terms of intelligence, connectivity and autonomous driving,” said one of the sources.
think rose gold
All four sources said a sharp focus on the customer is already paying off in China in recent years.
A campaign to create colors only in China researched the preferences of young luxury goods buyers. Despite being sensitive to being seen as hip and tech-savvy, there has been a revived interest in styles inspired by China’s ancient dynasties.
As part of that research, the studio came up with “Rose Gold Metallic”, on the rose gold tones adjusted for the cars used as the exterior paint for the first time for the Mercedes-Benz A-Class L sedan in 2018. difference. New EVs such as the EQA and EQB now come in Rose Gold, and this EQC also has an interior tone.
“Global ideas inspired by China,” said a source close to the studio, adding that while Mercedes needs to cater to its China customers first, some of the ideas developed in China will be global.
The studio’s relocation to Shanghai was partly driven by the need to speed up the design process by making it more digital, as most of the virtual model-making vendors are based there.
“Plus, Shanghai is a very easy place to recruit design talent,” said a source close to the studio, which is north of The Bund, the city’s prime waterfront district.
Designers usually sketch a car on paper or a touch-sensitive computer screen and expert modellers then help mold the design into clay models. Mercedes-Benz plans to more or less eliminate those physical models.
Under the new process, the Shanghai studio will review its designs using virtual equipment, except for the occasional quarter-sized physical model, according to one of four sources.
If the studio makes it to the finals of internal competitions for car design, it will send designers and modellers to Germany’s main studio to build life-size models for the final round, the source said.
rules of the road
Daimler’s campaign to bolster its technology development in China comes at a time when the cost of failing to keep pace with Beijing’s policymakers has never been higher.
Beijing’s sweeping regulatory action in recent months has wiped billions of dollars from the value of some of the country’s best-known private firms, and has hit the auto sector.
This is partly because tensions between the United States and China have created a difficult environment for foreign companies to import technology developed elsewhere.
And from battery technology to new types of mobility including smart connectivity and autonomous driving, Chinese policies and regulations are rapidly changing and evolving.
“If you respond to the change after the policies and regulations are in place, it’s too late,” said a close associate of Daimler.
With this in mind, the tech center works closely with the brand’s external affairs team to keep its finger on regulatory pulse – and the key when it comes to so-called vehicle-to-everything, or V2X, technology. has been proved.
V2X controls communication between a car and “everything,” from 5G cellular signals to low-Earth-orbit satellites to smart traffic lights and road-mounted cameras.
In China, vehicles will soon have to come with full V2X capabilities to achieve top safety rankings under a new version of its Vehicle Safety Assessment System, or New Car Assessment Program (NCAP), which is expected in 2025.
One of the Tech Center sources said, “We knew this regulation was going to go into effect. We started developing self-drive technologies, including V2X, that are compliant with the new law and enforced by the new regulations. Well done before it happened.”