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Shanghai Motor Show 2017: Daimler to show Mercedes A-Class sedan concept, pushing localisation strategy




Daimler is to show a concept that will hint at the next generation of its Mercedes A-Class and suggesting a future body style for this model, as the company pushes its localisation strategy in China.

IHS Markit Perspective:

  • Significance: Daimler is to show a concept that will hint at the next generation of its Mercedes A-Class as well as suggesting a future body style for this model.
  • Implications: This is intended to support the Mercedes brand's current successes both globally and in China.
  • Outlook: With the introduction of this variant and further new models, IHS Markit expects sales of Mercedes passenger cars based on the MFA platform to grow from 630,300 units in 2016 to around 870,700 units by 2021.

Daimler's Mercedes-Benz brand has announced that it will display a concept at the Shanghai Motor Show (China) that will hint at the next generation of its compact A-Class, as well as a potential new body style. Known as the Concept A Sedan, the study uses an evolution of the automaker's current design language. The automaker has said that the vehicle – which stands 4,570mm long, 1,870 wide and 1,463 mm tall – has been "designed with the proportions of a dynamic, coupé-like and simultaneously compact, premium sedan." It has also noted that the "traditional three-box design" features short overhangs, especially at the rear; a slim greenhouse that has been pushed towards the rear, larger side windows and a higher beltline. The vehicle also features tight wheel arches with 20-inch wheels fitted.

Furthermore, the front of the car shares similarities with the that of the Mercedes-AMG GT, with "Powerdomes" in the bonnet and large air inlets beneath the grille. The headlights also features a long, narrow look with a grid structure that has been coated with an ultraviolet (UV) paint that gives a glowing effect depending on the type of light, with for example the daytime running lamps producing a white colour. The rear benefits from a diffuser look as part of the bumper with integrated exhaust deflectors. The concept also features a large, glass panoramic roof.

Separately, it has been reported that Daimler is aiming to significantly boost local production of vehicles under its Mercedes Benz brand. Hubertus Troska, member of Daimler's Board of Management with responsibility for the company's operations in China told the China Daily in an interview: "We will continue to delight our Chinese customers with new ideas and great products" He added, "With China being one of the most important SUV [sport utility vehicle] markets for Mercedes-Benz, the soon coming new GLA embodies our SUV DNA in its most compact form."

Outlook and implications

The family of Mercedes compact vehicles based on the MFA architecture has been very important to the brand since the first was launched during 2011, and saw the brand take a more conventional approach to vehicles in this space versus its first generation of such vehicles. However, this has allowed it to explore a far wider range of body styles and support its recent growth in volumes. The second-generation A-Class and first-generation B-Class sold volumes of 292,700 units at its peak during 2006. However, the flexibility of the MFA platform to offer a range of body styles, from traditional hatchback and sedan models to niche vehicles like multi-purpose vehicles and the increasingly important crossover has meant that sales of vehicles based on this platform hit 630,300 units during 2016. This also makes up around 30% of the brand's record sales last year.

Although the brand already sells the CLA, a coupé-like four-door sedan, the Concept A Sedan hints at an additional slightly more traditional three-box sedan body style that will come on the introduction of the next generation of these compact models. China is expected to be the biggest single market for this new sedan once it is launched in 2018, underlining that despite the strong growth of the crossover market, there is still a big sedan market. This will be one of the reasons why Mercedes has also chosen to build this vehicle locally. However, we also expect it to be built in Mexico at the new Aguascalientes site, which will be used to supply markets in North America and Europe mainly. It remains to be seen whether there will be some cannibalisation between two models, although it is likely to position the CLA at a higher price point. The production Concept A sedan will also be a more direct competitor to Audi's A3 sedan and the recently introduction BMW 1-Series sedan.

With the introduction of this variant, the anticipated GLB sport utility vehicle (SUV) during 2019 and an A-Class coupé during 2020, IHS Markit expects sales of vehicles based on the MFA platform to continue to grow over the next few years. We see that by 2021, Mercedes brand vehicles sold off this architecture will hit 870,700 units by 2021.

While the new sedan A-Class will support Mercedes' growth in China, it is already seeing a strong push with the localisation of its SUV models. This will be highlighted by the updated GLA that will be shown at Shanghai Motor Show with tweaks made for local market demands, according to China Daily. Its localisation strategy has resulted in over 70% of Mercedes sales in China coming from locally produced models, with profits said to have grown by 37% year on year (y/y) during the same timeframe. Furthermore, the brand is expected to make the world premiere of its facelifted S-Class at the same event. Meanwhile Daimler is also highlighting the Denza new energy vehicle (NEV) brand with the new Denza 400 model which benefits from an upgraded battery, and other components and a range of up to 400 km. IHS Markit passenger car forecasts highlight that by 2020 Mercedes is expected to continue to close the gap to Audi particularly during the decade to come.

About this article

The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.

About The Author

Mr. Ian Fletcher serves as a Principal Analyst within IHS Automotive.

He specializes in the British, French, Scandinavian and Southern European markets and has been an automotive industry analyst since 2006. Mr. Fletcher previously worked for Bentley and Jaguar, specializing in chassis technology before joining JATO Dynamics, the automotive research data company. He holds a Bachelor of Engineering (Hons.), in Automotive Engineering from the University of Central England, Birmingham, U.K.​