Mercedes-Benz Group has announced plans to significantly accelerate localisation of production and sourcing in China after a sharp revenue decline in its largest market dragged 2025 group profits lower than expected. In preliminary full-year figures released January 2026, the German luxury carmaker reported China sales revenue fell 11–13% year-on-year, driven by intense price competition from domestic EV makers, weakening consumer demand, and loss of market share in the premium segment.
The company now intends to raise the localisation ratio of its China-built vehicles from the current 70% toward 90%+ by 2028, including deeper integration of local battery cells, electric motors, and electronic components. CEO Ola Källenius stated: “China remains our most important single market profits. We will double down on local value creation to restore competitiveness, protect margins, and respond faster to customer preferences for electric and intelligent vehicles.”
The accelerated localisation strategy reflects broader industry trends among foreign automakers in China, where domestic brands like BYD, NIO, and Li Auto now dominate the EV and premium segments. Mercedes-Benz aims to defend its position by becoming “more Chinese” in supply chain and innovation while preserving German engineering DNA.
China Bans Dual-Use Exports Including Rare Earths to Japan Over Taiwan Remarks 
China’s DeepSeek Upgrades Chatbot with Advanced ‘Interleaved Thinking’ Feature Amid Next Model Buzz 
North Korea Fires Ballistic Missiles Hours Before South Korean President’s China Visit 
MindRank Advances China’s First AI-Assisted Drug to Phase 3 Trials, Slashes R&D Costs by 60% 
China Enforces 50% Domestic Equipment Rule for Semiconductor Expansion 
Chinese Firms Anchor in Dubai Free Zones to Navigate Trade Barriers and Expand Reach