Cutting connections with China economically is unfeasible, according to the CEO of luxury automaker Mercedes-Benz (MBGn.DE), who also cautioned that doing so would jeopardize most of Germany’s industrial sector.
Europe is attempting to lessen its reliance on China as the pandemic disruption and the Ukraine crisis have brought attention to the risks of relying on oligopolistic suppliers and the vulnerability of supply chains.
Ola Källenius, CEO of Mercedes-Benz, warned that severing commercial connections with China is “unthinkable” and that doing so would jeopardize most of Germany’s industrial sector. He was quoted by the German tabloid Bild am Sonntag as saying, “Decoupling from China makes no sense because the major players in the global economy, Europe, the US, and China, are so closely intertwined.”
The largest auto market in the world, China, is an important market for German automakers. Beijing Automotive Group Co Ltd (1958. HK) and Geely Chairman Li Shufu are two of Mercedes-Benz’s major owners.
In 2022, China contributed 37% of Mercedes-Benz’s automobile sales and 18% of its income, and Kaellenius anticipated further growth. “Our sales figures in China are increasing, and I am quite optimistic that we will also grow this year. During the corona years, the wealthier Chinese, in particular, made extraordinary savings,” Kaellenius said. “This purchasing power should benefit us.”
