Mercedes-Benz Sticks With China, Targets 400,000 Annual Sales in the US

Mercedes-Benz is preparing a comprehensive update to its strategy through 2030 and beyond, with plans to lift annual US sales from over 300,000 vehicles to around 400,000. The figure signals a clear shift in priorities. The German automaker wants to reduce its reliance on Chinese profits without abandoning the market altogether.

China Remains a Cornerstone

CEO Ola Källenius said Mercedes can't exclude China from its strategy, describing it as an indispensable market and a key innovation hub. A strong presence there remains essential for any global automaker looking to stay competitive — especially against aggressive local brands. But the downturn in the world's largest car market exceeded expectations and weighed heavily on the company's financial results, particularly in the luxury car segment.

Reworking the China Operating Model

Mercedes is reassessing its entire operating model in China. CFO Harald Wilhelm said the goal is to cut dependence on profit sources there by localizing the supply chain and relying on domestic components in vehicles built inside the country, edging toward full local sourcing. The move aims to lower costs and sharpen competitiveness against mounting pricing pressure.

The US Becomes the New Battleground

Across the Atlantic, Mercedes is betting on stronger growth in the United States through additional investment. Competition is heating up. Rival Audi previously announced a $4 billion investment to build a new assembly plant in the US, expected to create around 4,500 jobs, putting direct pressure on the three-pointed star to move fast. The American market has become a decisive arena for German luxury brands.

Cost Cutting at Home

In Germany, the company is intensifying efforts to improve productivity and reduce expenses. Mercedes plans to relaunch a voluntary early retirement program with compensation for employees in indirect roles starting in December, following strong uptake in the previous round. The numbers are heavy. The company booked around 1.8 billion euros in provisions tied to the earlier program during 2025 and expects the bulk of the new program's financial impact to appear in 2027 results, meaning budget pressure will persist for years.

What It Means for the Car Market

The new strategy reflects a tougher reality than Mercedes pricing projections anticipated in its traditional strongholds. The company is moving on three fronts at once: holding China, expanding in the US. Cutting costs in Europe. The hardest challenge will be balancing these priorities without hurting product quality or the brand's standing in the global luxury car market. A detailed review of the China business is due next year. It will reveal the true scale of the overhaul.