Mercedes' China H2 sales may slow as new E-Class output raised: Daimler

BEIJING: Mercedes-Benz sales in China may slow in the second half of 2016 while the company ramps up production of its new E-Class model, Daimler's China head said on Monday.

Hubertus Troska said he does not expect local production of the new E-Class to reach full capacity until the fourth quarter of 2016. He was speaking at a media roundtable in Beijing at the China launch of the new E-Class Long Wheelbase.

China sales for Mercedes-Benz were up 26.2 percent at 37,277 cars in July, the company said earlier this month.

Troska also said Daimler will be bringing its new electric cars to China, a key market, although he did not give a specific time.

Chief Executive Dieter Zetsche said in July the company is expected to announce its plans for electric cars at the Paris motor show in October.

Mercedes has already introduced its C-Class and GLE plug-in hybrids in the Chinese market.

Aside from regulations to encourage growth of China's new-energy vehicles, the Chinese government has tried to stimulate the overall car market by halving sales taxes on cars with engines of 1.6 litres or less in October last year. The tax cut is set to expire at the end of 2016.

"I think the measure really worked so we have big trust there will be prudent adaptation of the rules," Troska said, when asked whether Daimler is expecting China to extend the tax cut at the end of this year.

He added 1.6 litre engine cars make up around 25 percent of the company's sales volume.