Mercedes-Benz continues to set pace

Michael Behrens Mercedes-Benz Vietnam’s CEO

It was a spring day in early February 2006 when Ho Chi Minh City was overwhelmed with the fantastic atmosphere of the traditional Tet festival.

However, German-invested Mercedes-Benz Vietnam’s over 400 workers seemed not to be thinking about such atmosphere, but about another more important thing: how to secure their employment. Some new car models were about to be marketed and the company’s managing board was in a meeting to make an important decision: whether the company would continue its local manufacturing or import completely built units? Risks would lessen if the company shifted from local production to import completely built units. At that time, taxes inflicted on vehicles had just increased vehemently and suddenly, causing a high level of vehicle inventory and low sale revenues.

After a two-day discussion, the board decided to invest more capital into production, then this inspired all company staff. This was the second time (the first one was in 1999) that the company made such a bold decision, and also the second time Mercedes-Benz Vietnam’s great confidence into the Vietnamese market won a big windfall.
 
A new journey

The continued investment laid a firm foundation for the company’s new development stage. With its sound pricing and marketing strategies, the company witnessed “unbelievable growth” over the next five years, with an annual sale of 3,000 units during the 2009-2011 period - a record for Mercedes-Benz Vietnam.

It would need several million dollars for a new car model to be produced, assembled and marketed under the complete knock down (CKD) form in Vietnam. That’s why very few car firms dare to invest.

Mercedes-Benz provides assorted car ranges with the same quality globally, no matter where the factory stands. Thus, the company won in 2008 a prize of C-Class production factory from its mother group Daimler and a prize on after-sales service.

Mercedes-Benz Vietnam now occupies over 60 per cent in the market share of Vietnam’s high-end segment and this rate is among the world’s highest ranking.

“We take the lead in high-end models as we make the strongest commitment in this market and we have most faithful customers. We invest much more in production, network and customer care services,” said Mercedes-Benz Vietnam’s chief executive
officer Michael Behrens.

“Vietnam’s customers like dealers having after-sales services near their home. That’s why we have expanded our new agencies,” he said.

Mercedes-Benz Vietnam workers celebrated a golden milestone by turning out the firm’s 20,000th car in Vietnam three years ago

More investment

Over the past 12 months, Mercedes-Benz has spent $13 million opening an additional four sales and service agencies in Ho Chi Minh City, Danang, Haiphong and Can Tho cities. At present, the company has 12 sales and after-sales dealers nationwide. This figure will be increased in the coming time.

This year is full of challenges for many sectors in Vietnam. However, Mercedes-Benz has invested another $9 million into building an electrodeposition coating paintshop with environmental friendly modern technology, and anti-erosion and heat-resistant Zircobond paint used in the spaceship technology. This paintshop, located within the 10 hectare Mercedes-Benz factory area in Ho Chi Minh City’s Go Vap district, will come into operation in 2013’s first quarter.

“We find Vietnam boasts great potential, though the country’s economy remains in difficulty. We will continue our investment as we want to keep our existing top position in Vietnam’s luxury segment,” Behrens said.

Looking towards the future

On the occasion of the official visit this week to Vietnam by German Vice Chancellor Philipp Roesler, who is also Germany’s Minister of Economics and Technology, Mercedes-Benz Vietnam shows it has also actively contributed to boosting the bilateral cooperation between Germany and Vietnam.

In Southeast Asia, Mercedes-Benz has also swollen its investment in “strongly developing markets.” For the first time in its history, Mercedes-Benz has begun to assemble the last stage of sport utility vehicles (SUV) like the M- and GL-Class models outside the main SUV manufacturing factory based in the US’s Alabama state’s Tuscaloosa city.

From now on, all remaining assembly stages of the M-Class model using semi-products and enclosed components will be completed in three nations, in service of the local consumption. The M-Class model will begin to be assembled in these nations this year, while the GL-Class will be assembled in India and Indonesia in 2013.

Mercedes-Benz Vietnam is also about to make the debut of a new GLK car model later this September. This model is locally assembled and also Mercedes-Benz Vietnam’s strategic vehicle model. Vietnam will also be the third nation for this model to be marketed, after Germany and the US.

After three years for over 1,000 GLK vehicles to be sold to Vietnamese customers, the new GLK vehicle now boasts modern headlights likened to “living eyes” and a forefront is likened to a “shark face”.

It is clear that Mercedes-Benz Vietnam has begun its new adventure in the Vietnamese market with this new GLK model.