Because the former money-destroying machine Denza is currently developing splendidly. From January to May, the company was able to increase sales of its plug-in hybrids and pure electric cars from 175 to almost 46,000 in the same period last year. This is shown by figures from the data service provider “MarkLines”, which are available to the Handelsblatt.
Accordingly, hardly any other car brand in the world’s largest vehicle market is currently growing as rapidly as Denza. The reason for the success: BYD, the Chinese market leader in electric cars, not only took over 40 percent of Mercedes’ shares in the company a year ago, thereby increasing its stake from 50 to 90 percent, but also ordered Denza to start over completely.
Denza: BYD is changing the design and distribution of electric cars
From workflows to model policy to sales, Denza has overhauled almost everything under the command of BYD. “All of a sudden it’s going surprisingly well without us,” says a Mercedes manager. Unlike in the past, the Swabians are no longer even responsible for the design of the Denza bodies.
BYD has completely taken over the production and development competence and last year discontinued the Denza X SUV series after less than three years on the market. In October 2022, production of the Denza D9 started in the economic metropolis of Shenzhen. The MPV stands out visually from all previous makes of the brand, which were designed more discreetly.
The D9 has rough edges and a front that looks brutal. The van’s radiator grille is so large that even the “kidneys” of many BMW off-road vehicles appear downright lovely. And the new, eye-catching Denza design is well received in China.
After Mercedes withdrawal: sales figures increase
Since launch, Denza has seen sales of the D9 improve week by week. In total, the company delivered around 55,500 vehicles from the series within eight months. For comparison: the company was only able to sell 23,300 units of the Denza 500, a modified Mercedes B-Class, and the SUV Denza X between 2014 and 2022.
After nine sobering business years, in which BYD and Mercedes had to pump hundreds of millions of euros in capital into Denza, the company is offering its owners a positive perspective for the first time with the D9.
Denza electric cars offer an unbeatable mix
The people carrier receives a lot of praise, says Willy Wang, car expert at the management consultancy Berylls Strategy Advisors. “In addition to the aggressive exterior design, things like legroom and comfort are also positively emphasized.” In combination with a good price, this is “almost unbeatable,” explains Wang.
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As a plug-in hybrid, the D9 is available in China from the equivalent of around 43,000 euros. That’s not small, but for a van with seven seats, partly very high-quality equipment with many displays and a maximum range of over a thousand kilometers according to the Chinese measurement cycle, it is quite attractive.
For the purely electric version of the model, the equivalent of at least 50,000 euros is due due to the larger battery. The brand scores with two fast charging connections, only one is usual in the industry. However, more than 90 percent of customers currently choose the plug-in option anyway, which, in addition to the electric drive, also has a combustion engine under the hood.
Under the leadership of Mercedes, the brand led a shadowy existence for a long time.
(Photo: AP)
In addition to the good price-performance ratio, Denza benefits from the fact that so far only very few multi-purpose vehicles with alternative drives have been offered in China. In the segment, which is particularly popular with larger families, there is still “a lot of room for improvement,” says Berylls expert Wang. “The competitor landscape is rather thin with few models from brands like Zeekr, Maxus, Roewe or GAC.”
Interested parties have so far driven Mercedes, BMW or Audi
However, the decisive factor for the future of Denza is whether the company can also grow outside of the rather small van segment. In July, the N7 will be the brand’s second model after the new start. The medium-sized SUV will use BYD’s blade battery technology and should be able to travel up to 702 kilometers without recharging.
Denza calculates with 30,000 pre-orders for the vehicle, which will probably cost the equivalent of at least 50,000 euros. According to sales manager Zhao Changjiang, half of the interested parties currently drive Mercedes, BMW or Audi.
This shows that Denza wants to position itself permanently as an electric premium brand. Monthly sales should soon increase from 11,000 to over 20,000 units – especially since Denza is likely to offer a large electric SUV as the third series in the course of the year, the N8.
BYD relies on direct sales with Denza
Similar to Tesla or Nio, the company is increasingly relying on direct sales for its expansion. Denza is currently building a good 76 of its own showrooms in 51 Chinese cities. This promotes brand awareness. Previously, the Denza models were mainly offered at selected Mercedes dealerships in China. An unsuitable environment, as quickly became apparent.
>> Also read: Figures in China show: German electric cars are being penalized in the premium league
Denza is now correcting this sales mistake and at the same time participating “in the success of the parent company BYD”, explains Berylls specialist Wang. BYD has recently overtaken Volkswagen in sales in China and is the new market leader in the world’s most important car market. A turning point.
Mercedes has known BYD as a partner at its side for more than a decade. But now, of all things, that the Denza joint venture is finally taking off, the Stuttgart-based company is hardly benefiting with its minority stake. Bizarre: Smart, in addition to Denza, is another Mercedes subsidiary that has developed amazingly well since the Swabians transferred operational management to the Chinese carmaker Geely.
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