Mercedes Praises China For Developing Cars So Quickly, Turns To AI To Catch Up
Mercedes acknowledges the "outstanding" speed of Chinese automakers and how they focus on customers.
Mercedes has plenty of confidence in its ability to compete with Chinese automakers, but that doesn't mean it isn't paying attention to what they're doing right. The world's second-largest luxury brand has openly acknowledged that China's automotive industry is setting an impressive pace, especially in developing new vehicles.
Speaking with Australia's Drive magazine, the company's newly appointed Chief Technology Officer, Jörg Burzer, didn't hold back his praise for the competition. He described the speed of development among Chinese automakers as "outstanding," which is quite an admission from a company with Mercedes' engineering pedigree and 140-year heritage.
However, Burzer was quick to point out that respect for the competition doesn't mean Mercedes believes it's falling behind in every area:
2028 Mercedes-AMG GT SUV
'What is obviously outstanding is the speed of developing in a way that the customer really… in terms of customer focus. Competition is good. It's good for the customer. On the one hand, I have a lot of respect. On the other hand, we also have self-confidence that we can compete with these guys in China but also in Europe.'
But the sales numbers aren't particularly encouraging. Mercedes fell by 19 percent in 2025 to 551,932 cars in China. This year is proving even worse, with deliveries through September dropping by 29 percent to 418,305 units compared to the first nine months of 2025.
The situation isn't much better globally. Mercedes sales fell nine percent last year to 1,801,291 cars, and deliveries through the first three quarters of 2026 dropped another 7.2 percent to 1,341,427 units compared to the same period in 2025. Of course, we can't attribute the decline solely to Chinese competition, but nearly all major traditional automakers are struggling.
Mercedes Wants To Develop Cars Faster
Mercedes is betting heavily on artificial intelligence to shorten development times, with a new system called PLM.AI designed to connect information from across the entire business. The company describes it as an AI-powered digital backbone linking vehicle development, purchasing, production, sales, and after-sales services.
The system aims to make information more accessible across departments, allowing engineers to identify problems, assess technical trade-offs, and make decisions earlier in the development process. Mercedes says PLM.AI could reduce overall development time by up to 30 percent while improving efficiency in individual engineering processes by up to 50 percent. The company also expects AI-powered simulations and digital development processes to reduce the need for physical testing by as much as 50 percent over time.
2028 Mercedes-AMG GT SUV
Mercedes Leans Even Harder Into Artificial Intelligence
AI agents already assist with tasks such as optimizing material costs, handling certification and homologation, identifying faults, and supporting software development. PLM.AI takes things a step further by connecting these previously separate applications through standardized data models, giving teams access to relevant information in real time.
Importantly, Mercedes insists that faster development won't come at the expense of quality or safety. Engineers will remain responsible for making the final decisions, with AI serving as a tool to help them work more efficiently rather than replacing their expertise.
The ambition is clear: Mercedes wants to bring new technologies to production faster without compromising the standards associated with the three-pointed star. And with Chinese automakers earning praise for their development speed, the German company has plenty of motivation to do the same, even if its sales numbers are going from bad to worse.
Mercedes-AMG CLE 646 Spezialanfertigung
Many New Mercedes And AMG Models Are Coming
Mercedes isn't sitting still while Chinese automakers ramp up the pressure. The company has an ambitious product offensive planned, with a wave of new and updated models across its lineup. A new entry-level model is in the works, alongside the next-generation CLA, an electric E-Class, a baby G-Class, and the return of the G-Class Convertible. On the AMG front, a six-cylinder C53 is on the way, along with a new GT Black Series and an open-top G63.
Whether this new-model onslaught will be enough to reverse the downward trend remains to be seen.
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Source: Drive
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