Core Insights - Traditional luxury brands like BBA (Benz, BMW, Audi) are facing strong competition from new luxury brands represented by companies like Wenjie and Li Auto in the Chinese market [2][3] - Significant price reductions have been observed for multiple Benz models, with discounts reaching up to 50%, leading to the closure of several dealerships in cities like Tangshan, Dongying, and Luoyang [2] - Mercedes-Benz's net profit after tax dropped by 55.8% year-on-year in the first half of the year, with total sales in China declining by 14% to 293,200 units [2] - Audi and BMW also reported declines in sales, with Audi's sales down 10.2% and BMW's net profit decreasing by over 29% [2] Market Dynamics - The definition of luxury is evolving as the automotive industry accelerates towards electrification and intelligence, with younger consumers prioritizing technology and practicality over brand prestige [2][3] - Mercedes-Benz is adjusting its electrification strategy to allow for a coexistence of fuel and electric vehicles, catering to different market conditions, particularly in China [3][10] - The acceptance of intelligent technology varies globally, with Chinese consumers showing the highest willingness to adopt smart features, while North American and European consumers express concerns about privacy and data security [3][9] Technological Focus - Mercedes-Benz identifies five key future technology anchors: electronic and electrical architecture, powertrains, autonomous driving, smart cockpits, and data security [8][9] - The company emphasizes the importance of self-research in electronic architecture and powertrains to maintain competitive advantage, while opting for collaboration in areas like data security and chip development [10][12] - The strategy includes a focus on user-centered technology that enhances safety, comfort, and convenience, avoiding mere technological accumulation [6][7] Localization and Global Strategy - The unique dynamics of the Chinese market are seen as a testing ground for innovation, with Mercedes-Benz aiming to adapt its product development processes to align with local market demands [13][14] - The company plans to leverage its experiences in China to enhance its global operations, potentially developing next-generation platforms locally [13] - The shift from traditional luxury to new luxury is characterized by a blend of brand heritage with modern consumer needs, with China acting as a catalyst for this transformation [14]

Core Viewpoint - Mercedes-Benz is facing a series of technical and trust crises in the Chinese market, highlighted by widespread failures of in-car navigation and CarPlay functions, followed by a recall of 16,100 vehicles due to safety concerns, indicating a significant delay in the company's smart transformation efforts [1][2][3] Group 1: Technical Failures - On June 12, numerous Mercedes-Benz owners reported a sudden failure of in-car navigation and CarPlay functions, with the central screen going black and displaying error messages [2] - Mercedes-Benz acknowledged the issue was due to a backend failure and attempted to rectify it, but many users continued to experience problems, leading to dissatisfaction with the company's response [2][3] - Following the technical failures, the State Administration for Market Regulation issued three recall notices affecting 16,100 vehicles, further damaging the brand's reputation in China [2][3] Group 2: Recall Details - The recalls included 252 domestic C-Class and GLC SUVs due to incorrect fuse boxes that could lead to loss of power and airbag failure, posing a fire risk [3] - Additionally, 13,447 domestic EQC vehicles were recalled due to software defects in the battery management system that could cause thermal runaway in extreme conditions [3] - 2,151 imported A-Class, CLA-Class, and GLA-Class vehicles were recalled for non-compliant turbocharger nozzles, which posed emission risks [3] Group 3: Strategic Challenges - The series of technical incidents reflects a systemic lag in Mercedes-Benz's smart transformation, with the company struggling to implement its self-developed MB.OS operating system and collaborate effectively with local tech firms [1][3] - Despite plans to invest over 14 billion yuan in R&D in China, the company's progress in smart technology has been minimal compared to competitors like Volkswagen and Audi, who have made significant advancements [3][4] - Mercedes-Benz's electric vehicle sales in China dropped 23% in 2024, with overall sales declining by 7% to 683,600 units, indicating challenges in adapting to the "software-defined vehicle" era [1][4] Group 4: Financial Performance - In 2024, Mercedes-Benz's global sales fell by 3% to 1.983 million units, with revenue decreasing by 8.5% [4] - The company announced a shift in strategy, abandoning its 2030 full electrification plan and restarting the development of fuel vehicles to recover profits [4] - To address ongoing challenges, Mercedes-Benz initiated the "Next Level Performance" cost-saving plan, aiming to reduce costs by 5 billion euros by 2027 [4][5] Group 5: Industry Perspective - Industry experts suggest that Mercedes-Benz urgently needs to restructure its technology R&D system and improve user response mechanisms to remain competitive in the smart vehicle market [5] - The company's failure to address basic issues, such as OTA upgrades and battery management, has resulted in significant customer dissatisfaction, particularly during widespread technical failures [5]