Mercedes CEO: China turnaround is under way

Daimler AG CEO Dieter Zetsche says new products plus the reorganization of its distribution system are helping Mercedes-Benz to gain traction in China.Mercedes-Benz aims to raise its average global return on sales to 10 percent, up from 7 percent in 2013.BMW AG and Audi AG last reported a quarterly automotive operating margin of 9 and 9.4 percent, respectively. They have not yet released their annual financial results."The biggest element of our profitability gap remains China, where we were in a pretty poor condition in comparison to our peers," Zetsche told analysts on Friday.Daimler refocused its Chinese operations in March, merging its sales activities for imported and locally made Mercedes-Benz cars into a joint venture company in an effort to crack down on discounting.It used the introduction of a facelifted version of the new E-class sedan in China to cut the level of discounting in half while at the same time almost tripling sales volumes."We see the next opportunity with the C-class this year. It is basically with the C and E-class where we had the problem," Zetsche said.Inventories of the old C-class are low, he said, a factor that should help create pent-up demand for the next version.

Mercedes CEO: China turnaround is under way

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