Mercedes-Benz CEO Vows to Protect U.S. Business Amid Scrutiny Over Chinese Shareholders

Mercedes-Benz CEO Ola Kaellenius pledged on Tuesday to take necessary steps to protect the automaker's U.S. business, addressing investor concerns over potential market restrictions stemming from the company's significant Chinese ownership. The comments came during the company's second-quarter results presentation as it faces increasing legislative scrutiny in Washington.

Geopolitical Headwinds

The commitment follows the approval of legislation by the U.S. Senate Commerce Committee last week designed to toughen a ban on Chinese automakers. The measure could theoretically impact Mercedes-Benz due to its ownership structure, as its top two shareholders are Chinese entities.

Chinese automaker BAIC Group and Geely founder Li Shufu collectively hold nearly 20% of Mercedes-Benz's listed shares. "If we need to make adjustments to comply with anything, we will make sure that we protect our presence and our business in the U.S.," Kaellenius said, according to Reuters. He added that the company is monitoring the debate closely and is "deeply involved" in discussions with relevant parties.

U.S. Market as a Growth Engine

The focus on protecting the U.S. market comes as Mercedes-Benz faces declining sales in China, where it has struggled to keep pace with the rapid shift to electric vehicles. In contrast, the U.S. remains a key growth market for the German luxury brand, particularly for its profitable combustion-engine vehicles.

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Key figures underscoring the importance of the U.S. market include:

• 15% sales growth in the U.S. during the first six months of the year.
• Over $7 billion in pledged investments for its U.S. operations.
• A $4 billion investment through 2030 to expand SUV production at its Alabama plant.

Deepening the U.S. Footprint

To further insulate its American operations, Kaellenius suggested the company could establish engine production in the United States. This move would depend on the outcome of ongoing negotiations to revamp a North American trade pact, which may include new U.S.-specific content requirements for vehicles.

This strategy is supported by strong financial incentives. "If you are manufacturing locally in the U.S., it is a licence to print money," independent automotive analyst Matthias Schmidt told Reuters, highlighting the profitability of domestic production.