Mercedes-Benz plans to make large-scale investments in China, including

Last year, Mercedes-Benz sold 737,200 vehicles in China, making China its most important single market.

Mercedes-Benz is preparing a massive investment in its China business aimed at boosting local sales, especially of SUVs.

China has long been an important market for luxury automakers. Last year, Mercedes-Benz sold 737,200 passenger cars in China, far more than the 659,400 it sold in Europe and 298,000 in the United States. But while sales in Europe are set to rise 7% through 2023, they are down 2% in China. The situation worsens further in the fourth quarter of 2023, with Chinese sales plunging 8%.

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Mercedes reported sales of 416,000 vehicles in China from January to July, down more than 9 percent from the same period last year. The decline has attracted attention as Mercedes and its joint venture partners prepare to invest 1.8 billion euros ($1.9 billion).

A source recently told Business Daily that a long-wheelbase version of the popular GLE is in the works. The news is significant not only because LWB (long wheelbase) cars are popular in China; it is also because the model will be developed and produced locally, while the standard GLE will be imported from the U.S. The new GLE’s wheelbase is expected to be about 11.8 inches (300 mm) longer.

Mercedes-Benz will also launch the next-generation CLA, offering both electric and internal combustion engine versions, to expand its Chinese product line. In addition, the pure electric V-Class MPV will be launched next year, marking an important step in Mercedes’ commitment to covering more market segments.

One car that has performed particularly poorly in China is the Mercedes-Benz EQS. The German media said that only 663 units were sold in the first seven months of this year, less than half of last year’s sales. A key reason is believed to be the ongoing price war among Chinese electric car manufacturers, in which Mercedes is not participating.