Benz to integrate distribution channel in China
- Source: globaltimes.cn
- [17:12 February 15 2011]
- Comments
Benz has started a reform on distribution in China since the company achieved a 115 percent sales growth in 2010.
BAW has already confirmed the news that the ex executive president of Beijing Benz, Si Wei, was transferred to BAW to lead the newly-established sales department of Benz. According to speculations of experts of the industry, Si's promotion indicated that Benz will take measures to integrate its distribution channels in China. Hua Lixin, CEO and chairman of Daimler Northeast Asia Ltd. revealed that Benz was planning to set a new department over Mercedes-Benz and Beijing Benz to solve the problem.
Currently Benz has two distribution channels in the nation, one of which is Mercedes-Benz China, which mainly sells imported Benz cars while the other is Beijing Benz, which sells China-made cars. The two distribution channels cooperate in brand promotion and work independently in marketing. Si hopes the new department could maximize cooperation and minimize divergence.
Benz sold 147,670 cars in China last year, up 115 percent, among which sales of Beijing Benz exceeded 50,000, 180 percent higher than that of 2009, earning a profit of 16 billion yuan ($2.43 billion), up 158 percent.
Although Benz claimed that its December's sales in China exceeded that of BMW and Audi, the other two German automakers refused to admit the news. In the tough competition, Benz's complicated distribution channels hinder its development compared to the other two companies' concise distribution channels.
Among Benz's 120 dealers in China, around 50 belong to Lei Shing Hong Machinery (LSHM), which covers 40 percent of the market share of Benz China. BAW's move was also read as an attempt to break off the restraint of LSHM. For Benz itself, LSHM's monopoly also blocks its development in China. Referring to whether the new marketing network will be similar with that of Audi and BMW, Hua said it was still undecided, and Benz would seek the most suitable way.
Benz has set a sales target of 500,000 in China by 2015.
