Mercedes Rethinks the Car for China: Big, Very Big, Incredibly Big

The instruction came from the top, and it was about size. In an interview with the German trade press Automobilwoche, reported in China by Sina Tech and passed around the country's car world all of Wednesday, Mercedes-Benz chief executive Ola Källenius said the company's product planning must now revolve entirely around what Chinese consumers like. First among their preferences: "In China, cars must be big — very big, incredibly big" (大，非常大，大得惊人). The German original, groß, sehr groß, unglaublich groß, was quoted and requoted until it read as a small confession: the maker of the E-Class has concluded that China wants its cars even bigger.

The remark is easy to laugh at and harder to argue with. "Most cars here serve a whole household, not one person, so the bigger the car, the more situations it fits," as the car blogger Chen Zhen put it from Zhuhai. In a country where many families run exactly one car — the commute, the school run, the grandparents, the holiday road trip all in one vehicle — interior space is not a luxury feature but the basic product spec. A European executive's instinct to style a car for the driver meets a market that is styling it for the back seat.

The second half of the interview was the more consequential one. The price war that has consumed China's car market for three years has forced a change in how the money works too: Mercedes must, in principle, localize 100 percent of its cost structure. Building cars in China while depending on parts exported from Germany — and on value created in Germany — "no longer works", Källenius said. A markets commentator drew the obvious parallel the same morning: Nissan and Toyota are likewise raising the share of parts bought locally and building in China for export. "The essence is that our supply chain is complete and our costs are low," he wrote — a matter-of-fact summary of the position Chinese manufacturing now holds. On Baidu's search board the story ran as "Mercedes Is Changing: 100 Percent for China."

The first car built on the new logic is an all-new, fully electric E-Class, due in 2027. Behind it sits Mercedes's largest product offensive in its history — 40 new or updated models in three years — and the MB.OS software platform, which Källenius described as flexible enough to plug in partners like NVIDIA market by market, the way one assembles Lego.

What remains unsaid is the timeline. Källenius warned that falling behind Chinese rivals on size, space design or digital intelligence would mean being "eliminated", and allowed himself confidence "by no means arrogance" that the brand still attracts Chinese buyers. But decisions made today, he said, only show results in three, four or five years — exactly the lag in which local competitors took the market away from the German brands once already. The cars that decide whether Mercedes keeps China are being drawn up now, in China.