Shanghai: Daimler AG's sees China sales exceeding the 10 per cent overall growth of the car market this year, a senior company executive said yesterday.

Global luxury car makers, from Bayerische Motoren Werke AG or BMW to Audi AG, have racked up eye-popping sales in China, where a growing army of the super-rich is fuelling demand for luxury items, from Gucci handbags to Rolls-Royces.

"We want to grow faster than the 10-15 per cent, our condition is that we grow faster than the total market and also the luxury car market," Klaus Maier, chief executive for Mercedes-Benz's China operations told reporters in Shanghai.

China has been a major bright spot amid a global industry which are still recovering from a steep downturn.

Scrapping of quotas

But car sales this year will slow down considerably or even decline, as one industry observer had warned, after Beijing scrapped its incentive plans for small cars.

The Beijing city government's recent move to impose quotas on new car registrations and possibly similar moves by other big cities to tackle traffic gridlock will also apply the brakes on the market.

Ulrich Walker, chief executive of Daimler Northeast Asia, said he did not believe these measures would have much of a negative impact, as rising incomes and mobility are bringing new customers into the firm's fold.

"At the moment if you are talking about the [sales] volume, more than 50, 60 per cent are on the east side of China, if you go west, there is a huge potential of customers who want to have mobility," Walker said.

Daimler makes Mercedes-Benz E-Class and C-Class cars in a tie-up with Beijing Automotive Industry Holdings Co (Baic) is also in discussions to expand the joint venture's product portfolio to include Mercedes-Benz A-Class and B-Class vehicles, Walker said.

Capacity expansion

In 2010, a total of 147,670 Mercedes-Benz cars were sold in China, up 115 per cent. Volkswagen's Audi sold 227,928 units while BMW sold 168,998 units.

Daimler Chairman Dieter Zetsche said in October 2010 he aimed to sell 300,000 Mercedes-Benz cars in China annually in 2015.

The German automaker is also investing ¤3 billion (Dh14.4 billion) in China over the next five years to expand its capacity and dealer network, including a new engine plant for Mercedes-Benz.

Walker said the firm also hopes to increase localised capacity to 200,000 vehicles by 2015, in Line with Zetsche's statement that 70 percent of Mercedes-Benz models sold in China will be locally made by that time, up from 30 per cent currently.

Maier said the firm aims to add between 25 to 30 new car dealers this year.

Daimler is also among the front runners to go green. It unveiled plans in March 2010 to develop electric cars in China with BYD, a car and battery maker backed by US billionaire Warren Buffett.

Walker said the cooperation with BYD will lead to a jointly-developed fully electric compact car segment under a new brand to be launched in 2013.

He also said the firm's joint venture with Beiqi Foton Motor will make Foton Auman trucks that will use a Mercedes engine.

Fiat scores key win

Carmaker Fiat SpA won narrow backing from its workers for a groundbreaking contract that limits strikes and absenteeism in exchange for investment in Italy, unions said yesterday.

Workers in a referendum at Fiat's historic but loss-making Mirafiori factory in Turin voted 54 per cent in favour of the new contract, a spokesman for the FIM union said.

Chief Executive Sergio Marchionne, who engineered the Italian carmaker's 25 per cent stake in Chrysler and transformed Fiat from an ailing conglomerate, had threatened to deploy the cash abroad if workers reject the changes.

The deal had been approved by most plant unions but rejected by the left-wing Fiom. The deciding factor was support from white-collar workers, union spokesmen said.

"A 46 per cent ‘no' vote seems tremendous to me. To make good cars, you don't need conflicts of this type," Fiom Turin representative Giorio Airaudo told Reuters.

The contract is part of a Fiat-led unprecedented overhaul of Italian labour relations, which have been based on national deals rather than on a plant-by-plant basis.

If workers accept the new contract, the company has pledged to invest ¤1 billion euros (Dh4.7 billion) to build new, high-end Alfa Romeo and Chrysler models at Mirafiori, Fiat's oldest plant and a symbol of Italian industry. "Now the industrial plan for Mirafiori will go ahead. Marchionne has to quickly deploy the investment, as he promised," FIM national secretary general Bruno Vitali told Reuters.