BERLIN/FRANKFURT, Oct 29 (Reuters) - German luxury

carmaker Mercedes-Benz said carmakers must adapt like

"animals" to survive in the fierce global auto market, where

price wars in China are squeezing margins and belt-tightening

U.S. consumers are cutting back on spending.

"The animal that is able to adapt is the one that survives

and thrives in evolution," Chief Executive Ola Kaellenius told

investors on Wednesday after reporting third quarter results.

"The hyper-competition in China is not going away anytime

soon," he added.

Mercedes-Benz, which reported better than expected auto

margins globally, is battling a wide field of rivals in China,

where competition and an economic slowdown has hit its peers

including Volkswagen, Porsche and BMW.

The company's China sales slid 27% year-on-year in the third

quarter, while sales in the U.S. market fell 17%, dented by the

impact of trade tariffs. Europe sales rose slightly.

"The market situation in the premium and luxury segment in

China remained tense, with foreign manufacturers in particular

reporting significant declines in unit sales," the firm said.