After decades of winning over Chinese buyers with its German engineering, Mercedes-Benz Group AG took the humbling step last fall of partnering with fast-food chain McDonald’s to hype its newest car.
In the “So Mc-Benz” campaign, Mercedes allowed a cheeseburger figurine to take the spot of its traditional three-pointed star on the all-electric CLA, a sedan it hoped would stop sales from sliding in the world’s largest car market. The ads were supposed to make the vehicle popular with China’s young and hip.
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It didn’t work. Mercedes sold only 1,153 units in China in the first half, a fraction of the more than 80,000 similarly priced SU7 sedans Xiaomi Corp. delivered in the period. The performance echoes the challenges BMW AG, Volkswagen AG and Porsche AG face in China, where they all reported second-quarter sales declines of at least 30%, worse than the overall market’s drop. Meanwhile, the likes of Xiaomi and BYD Co. are taking customers from them, depriving the Germans of a key growth and profit driver. So far, none of them has found a way to arrest the downward spiral.
It’s not that they’re not trying. Most of them have partnered with Chinese companies to gain access to the latest EV technology and better understand what local drivers want. Mercedes built a long-wheelbase version of the CLA to appeal to Chinese tastes for a roomier back seat. It packed the car with software including AI-powered voice control and priced it from just 229,000 yuan ($33,943), roughly 40% cheaper than the European version.
