MSIN300P: What are the Existing Challenges or Problems MBC is Facing in the Chinese market: Management Science Dissertation Essay, UCL, Singapore

Question 1: What are the existing challenges or problems MBC is facing in the Chinese market?

Question 2: What are MBC’s strategies in the Chinese market now?

Introduction – The Company

Mercedes-Benz is a German automobile company and it is a multinational division of the Germany manufacturer Daimler AG. Daimler AG is ranked as the 3rd largest car companies in the world in 2019 (Carlogos, 2020), which seeks to consolidate its position in the global market as a leading car manufacturer of innovative, reliability, high-class and efficient automotive vehicles (Cleverism, 2019). The company produces various types of vehicles in
different divisions, they are MBC (MBC), Daimler Trucks, Mercedes-Benz Vans, Daimler Buses’ and Daimler mobility (Daimler , 2019) respectively.

Automotive Industry in China

China is currently the world’s largest vehicle industry with the Chinese government expecting that automobile sales output reaching 35 million by 2025. In 2018, over 27 million vehicles were sold, which includes 23.79 million passenger cars and as the end of 2019. 10% of the cars purchased in China are luxury vehicles which has grown from around 6% from a few years ago. The luxury car market is concentrated and is being dominated by BMW, Mercedes-Benz and Audi, where they sold more than 1.95 million units in 2018. It is expected the China Luxury Car Market will anticipate a CAGR over 7% in the coming five years (Mordor Intelligence, 2019).

There is a lot of potential yet to be discovered for MBC in the near future. In the chart below we can see there is a rapid growth in Mercedes-Benz’s market sharee in Chinese automotive market share:

Research, Data collection and Analysis

In terms of research, this report will be focusing on research that is helpful for analysing Mercedes-Benz Car’s current market position in China, then to look for potential areas the company can improve on and challenges it has to overcome specifically for China’s automotive industry in order to increase its market share in China and be the market leader.

The hypotheses for the report would be:

1. MBC will be able to take the lead in Chinese luxury automotive industry by 2030.
2. MBC are able to overcome the challenges and changes through strategic development.

To carry out primary data collection and research, both qualitative and quantitative insights will be gathered from Chinese automotive industry consumers through the use of questionnaire in Part II of the report. The target group would be consumers who have thought of purchasing a car in China, and questions will be about their views on the future of the industry, as well as their opinions on MBC. In terms of secondary research, the McKinsey&Company China Auto Consumer Insights Survey 2019 will be used in Part I to
analyze the problems Daimler will face in the Chinese automotive industry.