At the crossroads of the global automotive industry's century-long transformation, the pulse of the Chinese market is profoundly rewriting the competition rules of multinational automakers. The penetration rate of electrification in the Chinese market has exceeded 40%, and the iteration speed of intelligent driving technology has exceeded Moore's Law. Faced with this change, even Mercedes-Benz, the inventor of the automobile, has not slackened in its pursuit of change and innovation.
On March 22, 2025, three senior executives of the Mercedes-Benz Group - Chairman of the Board of Directors Ola Källenius, Head of Greater China Business Tong Oufu, and Special Representative for China Affairs Tang Shikai - accepted an exclusive interview with The Paper during the China Development Forum, systematically expounding on the complete puzzle of their "China Strategy" - using Beijing and Shanghai as the dual engines of innovation, feeding back local R&D results to the global system, and reshaping the "Mercedes-Benz standard" in the wave of intelligent electrification.
The strategic logic of "in China, for China, and benefiting the world" demonstrates the depth of the 139-year-old luxury car manufacturer's commitment to China and its determination to control the automotive industry value chain for the next century.
From manufacturing base to innovation community
"Mercedes-Benz's business and development in China have always been strongly supported by the government." Kallenius emphasized at the beginning of the interview, "We have always said that China is 'not our homeland' for Mercedes-Benz." This often quoted statement now has a more substantial footnote. On September 4, 2024, Mercedes-Benz announced that it would invest an additional 14 billion yuan with its partners to support its largest product and technology offensive in the next 20 years in China.
Regarding the business in China, Ola Kallenius summarized the current situation as a "complete business structure": "integrating R&D, production, supply chain and technology partners, marketing and financial services." Compared with the scale when localization just started in 2005, this transformation is particularly significant at the R&D level - Beijing focuses on vehicle integration and electrification technology, while the Shanghai R&D center specializes in digitalization and intelligent driving, forming a "Beijing-Shanghai innovation dual engine" pattern. Ola Kallenius emphasized: "China's R&D is becoming more and more deeply integrated into Mercedes-Benz's global R&D network."
Specific examples of this integration are changing the direction of global technology flows. For example, in the new CLA, the L2++ advanced intelligent driving system developed by the Chinese team can achieve end-to-end intelligent driving capabilities from parking space to parking space based on a deep understanding of China's complex road conditions. The next-generation infotainment system, also built by the Chinese team, not only meets the unique needs of Chinese users for "watching movies, playing games, or holding video conferences in the back row", but is also expected to be extended to Mercedes-Benz products in other markets.
Now, "interactions between the Chinese R&D center and Mercedes-Benz R&D centers around the world are ongoing at any time." It is not difficult to imagine that in the future, the L2++ intelligent driving system led by the Chinese team may provide algorithm training samples for complex urban road conditions in Europe; the intelligent cockpit interaction logic developed by the Chinese team may also be tested for cultural adaptation in other R&D centers. This two-way empowerment breaks the traditional R&D model of "from the center to the edge, from the headquarters to a single market."
More and more global R&D tasks are being handed over to the Chinese team. The confidence to transfer rights stems from the particularity of the Chinese auto market and Mercedes-Benz's firm confidence in the Chinese market. As Ola Kallenius observed: "If we can succeed in the Chinese market, we will definitely be very competitive in other markets around the world."
At this point, Mercedes-Benz’s slogan “Leading the global trend with Chinese innovation” has long since changed from a slogan to a statement of fact.
Protecting the essence of luxury amid disruption
At present, car companies, media and consumers are getting deeper and deeper into the debate of "oil-electric confrontation", and Mercedes-Benz has given a more profound answer. "Our level of intelligence is not limited to pure electric models, the same level of intelligence will also be reflected in high-tech electrified fuel models." Ola Kallenius's statement reveals Mercedes-Benz's unique thinking on the technology route.
This "oil-electric intelligence" strategy has become concrete in the new Mercedes-Benz E-Class and the GLE SUV that will be produced in China this year. Take the new E-Class as an example. In the previous test drive experience, its "dodge and turn" on the highway is no less than that of human drivers, which effectively reduces the pressure of driving.
From the price of cars to the "three electrics" of cars, to smart driving, the intensity of the car war in the Chinese market is unquestionable. The decline in sales of luxury brands in the data of the China Passenger Car Association is not surprising to industry insiders. For such a market, Ola Kallenius's attitude is not blindly "catering", but shows a clear understanding: "One aspect of the rules of the game is technological innovation, but the other is that 'Why Mercedes-Benz, only Mercedes-Benz' - we must continue to maintain our traditional advantages."
This balanced thinking of "doing what you should do and not doing what you shouldn't do" has also been reflected in the products. The new CLA is equipped with a cutting-edge intelligent driving system and continues the "classic and timeless aesthetics and luxury"; the GLE SUV, which will be produced in China, will be upgraded to intelligent while still putting "safety, quality, and driving comfort" first; in the vehicle simulation collision test of the pure electric EQS, the car was split into 15 million units to analyze the collision force in detail. As Kallenius said, "these core values (of traditional luxury cars) are also very important to customers."
Strategic determination across cycles
Faced with global economic uncertainty, Mercedes-Benz has chosen to respond to fluctuations with strategic determination. "We will continue to invest in the Chinese market for a long time and continue to expand our business in China," Kallenius promised. This determination stems from his judgment of the fundamentals of the Chinese economy. "The Chinese economy has a very strong foundation for continued growth," Kallenius emphasized, "The Mercedes-Benz brand has a very solid customer base, and the scale of its customers is also expanding."
Taking the sales volume in 2024 as an example, in the core luxury market segment, the long-wheelbase GLC SUV and the long-wheelbase C-Class achieved an annual year-on-year delivery growth of over 40% and over 10% respectively; the long-wheelbase E-Class maintained a steady growth in its first full year of sales, with an average monthly delivery of over 10,000. In addition, in the high-end luxury market of RMB 1 million and above, the luxury flagship status of the S-Class remains unshakable, accounting for nearly half of the market share in this segment.
The excellent results are undoubtedly a positive feedback for Mercedes-Benz's firm investment in China. "Like other automotive markets, it is normal to experience ups and downs, but growth is the trend in the long run. This is why we continue to uphold a long-termist view in the Chinese market and continue to invest, hoping to fully grasp the growth potential of the Chinese market," said Ola Kallenius.
From the perspective of subjective initiative, Mercedes-Benz's strategic determination stems from the dialectical unity of "change and constancy". What changes are technology iteration and market strategy, but what remains unchanged is the bottom line of safety, quality and luxury; what changes are driving forms and user experience, but what remains unchanged is the core value of "customer first".
at last
When Ola Kallenius said, "China is not my hometown, but it feels like home," it was not only an expression of emotion, but also a strategic necessity. Mercedes-Benz's 20-year history in China is a microcosm of globalization's shift from "resource integration" to "value symbiosis." Today, as intelligent electrification reshapes the industrial landscape, Mercedes-Benz's 20 years in China reveal an essential law: the localization of multinational companies can no longer stop at market adaptation, but must be upgraded to value creation. When Chinese R&D begins to define global standards, this two-way empowerment is writing a new script for globalization - it's not about who adapts to whom, but about jointly defining the future.
Just like the new generation of pure electric long-wheelbase CLA model that is about to roll off the Beijing Benz Yizhuang production line, its three-electric system contains the energy of Chinese innovation, its intelligent core beats the pulse of global cooperation, and the three-pointed star emblem on the steering wheel is still the industrial totem that transcends culture and time. This may be the true meaning of "reinventing the car" in Kang Linsong's words.
