|
The
remarks by Ola Kaellenius come against a backdrop of
increasingly strained relations between the United States, China
and Europe after almost a decade of growth that has helped
Mercedes to emerge as the world’s biggest-selling luxury car
brand.
"The situation has become much rougher, with a tendency toward
rougher talks, right up to and including trade conflicts,"
Kaellenius told the Frankfurt-based ICFW Journalists association
late on Monday.
"We need to look at our production footprint and where it makes
sense, shift our production," he said during the video call
meeting.
"Last year we sold around 700,000 passenger cars in China. The
next biggest market is the U.S. with between 320,000 and 330,000
cars."
Thanks in large part to a strong rebound in demand from China,
Daimler and German rival BMW <BMWG.DE> both pre-released
forecast-beating third-quarter results.
"In the next 10 years we also expect the biggest growth in
China," Kallenius added, explaining that the luxury carmaker
will follow the market.
But with international trade tensions on the rise, the outlook
for global sales remains uncertain.
Britain's Brexit negotiations could end without tariff-free
trade with the European Union and serves as an example of how
things can go wrong, the Swedish executive explained.
"I am hoping for last-minute common sense," Kallenius said in
response to a question about his expectations on the outcome of
Brexit talks.
If Britain and the European Union fail to clinch a deal, World
Trade Organization (WTO) rules would apply, resulting in
tariffs.
"In the event of a so-called hard Brexit, we would not open
factories, because this would not be worth it, given our sales
numbers," Kaellenius said, referring to sales in Britain. "We
would have to learn to live with WTO rules."
Increasingly fragmented global markets make it harder to build
cars at a profit because it reduces economies of scale in
production, he said.
Mercedes-Benz, for example, only builds its top-of-the line
S-Class model in Germany. With global sales of only 100,000
vehicles, it hardly makes business sense to build new production
lines in the United States and China to build these cars
locally, he said.
However, tensions between United States and the rest of the
world are likely to remain, regardless of whether the
Republicans or Democrats win the U.S. election next month.
"What the two (presidential) candidates are saying is that they
have an interest in improving the trade balance, and we need to
be ready for that," Kaellenius said.
(Reporting by Edward Taylor; Editing by David Goodman)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
