MUNICH, Sept 7 (Reuters) - German luxury automaker

Mercedes-Benz is sticking with its premium strategy in

its main market China, where a brutal pricing war has cost the

group market share as local customers increasingly switch to

cheaper domestic models.

CEO Ola Kaellenius, speaking to Reuters ahead of the IAA

auto show in Munich, said the new electric GLC SUV - which

Mercedes-Benz unveiled on Sunday - would be instrumental in

recovering lost ground in the world's largest auto market.

"This is going to hit the nail on the head in terms of what

Chinese Mercedes customers are looking for," Kaellenius said.

"And yes, we charge a little bit more. But GLC fans can rest

assured ... from a pricing point of view, if you're currently a

GLC customer, you will also feel at home with this new electric

GLC."

Like Porsche, Mercedes-Benz has been protecting

margins at the expense of market share in China, where it

suffered a 19% decline in vehicle sales to 140,400 in the second

quarter of 2025.

Kaellenius said the company would not change its strategy in

China and would maintain its premium approach.

Mercedes-Benz and its European peers are currently awaiting

a lowering of U.S. auto import tariffs to 15% from 27.5%,

something Washington has pledged as part of the European Union's

move to eliminate tariffs on most U.S. goods.

"The European Commission and their trade team are working

with the American administration on this," Kaellenius said,

adding he hoped that the U.S. administration would soon sign an

executive order to get the tariffs down.

Kaellenius did not quantify the financial impact tariffs

have had so far on the group's results but said "we're doing

what we can to mitigate it".