Mercedes-Benz Integration Moves Forward Unstoppably: The preliminary completion of the integration between Mercedes-Benz China and Beijing Benz
The integration between Mercedes-Benz China and Beijing Benz will be supported by the finest talents and resources. Currently, significant progress has been made in this integration process. In the closing notes of Xu Wei's "Blue Lotus," nothing could hinder the integration between Mercedes-Benz China and Beijing Benz as their first joint new car launch after the integration concluded successfully. The domestically produced E-Class sedan, alongside imported E-Class Coupe and convertible models forming the E-Class family, stole the spotlight even from the evening's main attraction - the new Mercedes-Benz CLS.
Clearly, this was a carefully orchestrated move by the organizers. Within the past few months, this business integration case involving nearly hundreds of billions of yuan in annual sales and billions in net profit became one of the hottest topics in the automotive industry, with no shortage of doubts, speculations, and criticisms. "Nothing can stop the pace of the two Benzes' integration; nothing can hinder Mercedes-Benz's leadership ambition," said Jingbo Mao, Vice President of Marketing for Mercedes-Benz China, hoping to respond to external suspicions in this manner.
After the integration of Mercedes-Benz China and Beijing Benz, the domestic and imported E-Class cars now share the same stage. In the sales aspect, dealers now have only one point of contact who represents both domestic and imported vehicles. The integration mainly consists of three areas: market, sales, and regions.
In this grand integration drama of Mercedes-Benz, the first steps were taken in the market, sales, and regional sectors, followed by after-sales services and network development departments gradually completing the integration. Ultimately, this will lead to a capital-level restructuring, establishing a Sino-foreign joint venture sales company. Based on the current progress, Jingbo Mao is responsible for marketing after the integration, Gongming Cai (current Sales Vice President of Mercedes-Benz China) oversees sales operations, and Dahan Si (current Sales Director of Beijing Benz Sales Market Department) manages sales planning. They will report to Qiang Fu (current Executive Vice President of Beijing Benz) and Bo Hao (current Executive Vice President of Mercedes-Benz China).
Qiang Fu introduced that the regional management and sales aspects of the integration are basically completed, and both parties have begun jointly managing the sales of domestic and imported vehicles. However, Qiang also emphasized that "a bit more time is needed for the transition, as the staff may not yet be fully familiar with each other's systems, processes, and structures."
Miles McCullough, President and CEO of Mercedes-Benz China, admitted that the past two months were "the busiest period" of his work, with the integration "80% complete." However, he did not provide a final timeline for the integration. Data shows that in September, the monthly sales volume of domestically produced Mercedes-Benz increased from 4,000 units last month to 5,500 units. "In the coming months, the C-Class and E-Class will remain the focus of Mercedes-Benz sales in China," McCullough clearly understands that shareholders eagerly want to see an increase in the sales volume of domestically produced Mercedes-Benz.
Unifying the Marketing Platform
The integration measures between Mercedes-Benz China and Beijing Benz involve combining employees from unified functional departments to correspond with both domestically produced and imported Mercedes-Benz sales markets. In terms of sales, the responsibilities of regional sales managers from both companies have been redefined, reducing the scope of management areas accordingly. Thus, "for dealers, there is only one point of contact in sales, representing both domestic and imported vehicles," McCullough stated.
Currently, the marketing sector is the smoothest part of the integration, acknowledged by both McCullough and Qiang Fu. From a market perspective, the TV and print advertisements seen for the domestic E-Class are all planned and operated by the Mercedes-Benz China team.
Since August, the marketing team of Mercedes-Benz China began gradually participating in the marketing work of the domestically produced E-Class, readjusting its market positioning. Qiang Fu introduced that previously, the domestic E-Class was positioned as the "best administrative ride," targeting a somewhat narrow customer base that needed expansion.
Thus, under the responsibility of Jingbo Mao, the domestic E-Class was ultimately repositioned as "suitable for both driving and riding," targeting not only business professionals but also families. "All advertising and market activities revolve around this new positioning," Mao said. To accurately convey this change in positioning, Mercedes-Benz needed to develop a new advertising strategy for the domestic E-Class. For this purpose, Hollywood top star George Clooney emerged as the new spokesperson. According to Qiang Fu at the press conference, George Clooney aligns with the essence of the E-Class and is acceptable to female users.
Undoubtedly, this is the highlight of the marketing efforts post-integration of the two Benzes. In other words, both shareholders hope to see results within a short period to reinforce confidence in the integration’s future.
Jingbo Mao clearly understands the significance of winning this first marketing battle. Therefore, from planning to shooting the television advertisement, it took only 45 days. On October 1st, the advertisement was released on Weibo. In the ad, the E-Class is no longer a tool for flaunting wealth in commercial clubs but becomes George Clooney's choice for a quiet dinner in a small restaurant on the Hollywood hilltop after evading paparazzi. "A hero recognizes another hero; together with the versatile E-Class, return to your inner self."
Jingbo Mao summarized the core creativity of the advertisement in one sentence. Clearly, the E-Class places more emphasis on such emotional marketing compared to before.
On October 11th, the launch event for the new Mercedes-Benz CLS in Shanghai became the first new car release after the integration. Mao seized the opportunity to combine the E-Class family (including both imported and domestic versions), reinforcing the unique position of the E-Class in the entire Mercedes-Benz product series. This is the most direct benefit brought by the integrated marketing platform to the domestic Mercedes-Benz in terms of product marketing.
Mao introduced that integrating the marketing platform would maximize the promotional impact. Currently, Mercedes-Benz has also started the comprehensive marketing campaign for the C-Class, and the winter experience project for the C-Class starting in December will be another marketing platform.
Next Steps
After the integration of departments like the market, the next business sector for Mercedes-Benz integration will be after-sales services and network development. Regarding this, McCullough is confident, saying, "In the past, we cooperated very well in these two areas. For instance, the training department provided training services for both domestic and imported vehicles. Now everything is ready except for the establishment of a unified sales company."
However, in the eyes of some industry insiders, the Mercedes-Benz integration still faces numerous challenges. Among them, the most prominent issues are equity ratio determination and cultural fusion in management. Neither McCullough nor Qiang Fu wishes to explicitly address the equity issue, repeatedly emphasizing that there is no question of who dominates whom during the integration process.
From the user's perspective, the integration of the two Benzes benefits both domestic and imported Mercedes-Benz users in enjoying the same sales service treatment. For the Mercedes-Benz brand, the integrated platform also facilitates its future image shaping and sales improvement. Mao believes that the biggest difference in competition among high-end luxury automobile brands lies in creating value consensus, thereby increasing user value. On September 30th, the 12-episode large-scale documentary "A Century of Cars" planned by Mao began airing on CCTV Channel 10's "Discovery & Exploration" program, promoting the 125th anniversary celebration of Mercedes-Benz as the inventor of automobiles. Subsequently, for the long-wheelbase E-Class, Mercedes-Benz has launched the "E Dream, E Worry-Free" value-added plan, which will expand the experience of imported cars to the domestic mainstream models.
For Daimler and BAIC, a common topic is that although Mercedes-Benz sold 139,000 vehicles in China in the first nine months of the year, achieving a 38% increase, it still lags behind BMW's growth rate, especially in the sales of domestically produced vehicles. Even McCullough dare not explicitly state whether the initial target of selling 80,000 domestically produced Mercedes-Benz vehicles can be achieved.
Therefore, after all interest entanglements are resolved, regardless of who leads the BAIC Mercedes-Benz sales joint venture, the sales of domestically produced Mercedes-Benz must be placed as the top priority. This is the core interest of the Mercedes-Benz integration.