In a sign that it is confident in the continued growth of the Chinese market (at least the luxury sector), DaimlerChrylser plans to expand its Mercedes Benz dealer network aggressively from from 33 to 217 over the next 8 years, according to yesterday’s Frankfurter Allgemeine Sonntagszeitung.

The Mercedes Car Group faltered during the first seven months of this year, with global sales dropping 4% to 682,900 units. Sales for July dropped 9% to 98,100 passenger cars. The company attributed to the drop to strikes in Germany and to plant conversions to handle its new A-class compact.

That aside, the company saw increases in various models and regions, such as the US, where it posted record-breaking sales of 19,000 units...and China.

In July, DaimlerChrysler sold 6,200 Mercedes-Benz automobiles in Asia/Pacific— a 13% drop from July 2003. Sales for the first seven months through July 2004 amounted to 51,100 automobiles, down 4% from last year. But China accounted for 5,900 of the Mercedes-Benz vehicles sold in the first seven months, an increase of more than 50 percent on the results for the same period last year. (Source: DaimlerChrysler)

No wonder they want to expand the dealer network.

DaimlerChrysler is also looking to India.

[Management board member Rüdiger] Grube said that beyond China, DaimlerChrysler was also eyeing the Indian market for an expansion drive.

He said that in the “medium term” Daimler would sell three million cars per year there and noted that Mercedes already claimed 60 percent of the market share for luxury automobiles.

Three million? To put that in perspective—that’s 2.5 times the total number of cars Mercedes-Benz sold worldwide in 2003. And those 3M are just in that one market.

If there is any hope of managing the transition from hydrocarbon-based energy to a new energy system, if there is any hope of mitigating extreme emissions-driven climate change, the fleets that sell into China and India must optimize fuel efficiency and emissions control. We can barely support one giant addicted to gasoline and SUVs, much less another two. Chinese and Indian consumers will need to play a key role.