Mercedes-Benz, JVs to recall over 350,000 vehicles in China

The recall by Mercedes-Benz and its Chinese joint ventures will begin from October 15 and will include domestically built and imported cars produced from 2006 through 2012. (Reuters)
Updated 13 October 2017

Mercedes-Benz, JVs to recall over 350,000 vehicles in China

BEIJING: Mercedes-Benz, the luxury brand of German carmaker Daimler, and its Chinese joint ventures will recall 351,218 vehicles due to potential issues with air bags made by Japan’s Takata, China’s quality watchdog said on Friday.
The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said on its website that it was concerned about risks arising from possible defects in the cars’ air bag inflators.
Official Chinese estimates showed over 20 million cars in China had air bags made by Takata, which have been linked to at least 16 deaths and 180 injuries globally. The air bags have the potential to deploy with too much force and spray shrapnel.
The defect led to the biggest recall in automotive history and eventual bankruptcy of the Japanese maker which had become burdened with tens of billions of dollars worth of liabilities.
The recall by Mercedes-Benz and its Chinese joint ventures will begin from October 15 and will include domestically built and imported cars produced from 2006 through 2012, with models including the SLK-Class and A-Class, the AQSIQ said.
It follows similar recalls by General Motors and Volkswagen last month.
The Chinese watchdog asked the three automakers in July to recall vehicles in China affected by potentially faulty Takata air bags. Up to that time, the automakers had proposed recalling a small number of vehicles for testing and analysis.


Costco to open first store in China tomorrow

A staff member checks items at a Costco store during a media day in Shanghai ahead of its official opening on Tuesday. (AFP)
Updated 3 min 59 sec ago

Costco to open first store in China tomorrow

  • Local competitors ‘stealing ground with popular homegrown retailers’

SHANGHAI: The US retail giant Costco is diving into the thorny area of food retail in China with its first store opening this week, but analysts warn it faces a tough ride as it looks to succeed where a series of international retailers have failed. The move also comes at a challenging time with Beijing and Washington engaged in a tense trade war that has seen them swap punitive tariffs on hundreds of billions of dollars of two-way trade.
China has proved a brutal battleground for overseas food retailers in recent years, with many failing to understand consumer habits and tastes as well as local competitors building a stronger presence.
In June, French supermarket giant Carref

BACKGROUND

China has proved a brutal battleground for overseas food retailers in recent years, with many failing to understand consumer habits and tastes as well as local competitors building a stronger presence.

our agreed to sell 80 percent of its China business to domestic giant Suning after repeated losses.
And German wholesaler Metro is in the process of selling its operations to a local bidder and British grocery giant Tesco pulled out of the Chinese market in 2014.
“The Chinese market is very complicated and requires retailers to innovate and localize,” said Jason Yu, general manager of Kantar Worldpanel China.
But Costco thinks it can avoid the malaise that has plagued others with its “no-frills approach” and bulk-buy strategy.
The retailer will throw open its doors on Tuesday, five years after making its first online foray into China through Alibaba’s cross-border e-commerce platform Tmall Global.
Richard Zhang, Costco’s senior vice president for Asia, told AFP they had a “conservative” goal to sign up at least 100,000 new members for the new store, which is in a suburban district of Shanghai with a 2 million-strong population.
And Zhang said they had taken time to make sure that consumers in China knew their brand and the market was mature enough.
Costco will be targeting China’s affluent growing middle class, who know the brand from international travels.
However, analysts warned that local competitors are stealing ground with popular homegrown retailers such as Alibaba’s bricks-and-mortar Hema stores integrating online and offline shopping.
“Local retailers are reaching out to customers via all distribution channels while foreign retailers are not so flexible to adapt to new situations,” said Yu.
“The old way of a large and all-inclusive hypermarket doesn’t work in China.”
Chih-yuan Wang, retail research director at Mintel China Reports, warned that many foreign retailers adapted too slowly and “still didn’t catch up with China’s rapid ecommerce craze where customers go shopping on mobile phones.”
“The cost of (later) building a home delivery service is very high and may affect Costco’s basic strategy to provide the lowest available prices,” he said.
Costco’s big rival, membership-based warehouse Sam’s Club from Walmart, has over two decades of history in China and is still on the expansion trail with plans to reach 40 stores by the end of next year.
But Zhang said the fact that Chinese consumers are already familiar with a membership supermarket model could work to Costco’s advantage.
“Chinese consumers are ready to pay for a membership card that grants them an exclusive privilege to buy at a warehouse store, it’s not a new concept in the country,” said Zhang. “A mature market saves us efforts in educating customers.”