BEIJING — Daimler will recall 2.6 million Mercedes-Benz imported and locally built vehicles in China due to a software design issue, the country’s market regulator said.

Software may fail to communicate a vehicle’s correct location in the event of a crash, China’s State Administration for Market Regulation said in a statement on Friday.

A spokesperson for Daimler in China declined to comment further on the recall. Some 774,382 Mercedes cars were sold in China last year, the spokesperson said.

The recall will start April 12 and involve three batches of vehicles.

  •     2,600,677 units made between January 2016 and November 2020 due to a software design issue;
  •     33 units produced between August 2016 and July 2020 due to a connectivity issue related to a supplier;
  •     333 units manufactured between July 2016 and October 2020 due to a possible issue with connectivity of a communication module.

There may be some overlap between the three categories.

The recall comes days after an earlier callback involving the German automaker. That one was linked to 125,568 imported and China-made C-Class vehicles manufactured between June 2014 and February 2018 and deemed hazardous due to a safety risk.

Last month, Mercedes-Benz USA said it was recalling 1.29 million vehicles sold since 2016 for a similar reason.

Mercedes sold 2.05 million cars worldwide in 2020. Its largest market is China, accounting for around 35 percent of deliveries.
Asia’s biggest economy and the world’s biggest car market is by far the most important sales region for the automaker’s highly profitable flagship models, such as the S-Class sedan.

Premium car sales in China recovered strongly in the second half, a boon for the financials of luxury manufacturers like Mercedes.

German automakers’ consolidated earnings from China have the potential to receive a further boost from 2022 when new foreign-ownership rules allow EU automakers to raise their joint-venture stakes to above 50 percent, Bloomberg Intelligence wrote in a note in January.

Daimler Greater China Ltd. was founded in Beijing in 2001 and is responsible for the activities of Mercedes-Benz cars and vans, Daimler trucks and buses, Mercedes-Benz Financial Services, Mobility Services, the spare parts business, and research and development centers.

Mercedes-Benz and China’s Zhejiang Geely Holding Group, controlled by billionaire Li Shufu, last year established a joint venture to develop premium and intelligent electric vehicles, with both parties contributing 2.7 billion yuan ($415 million).

The global headquarters of the venture is in Ningbo in China’s east with operational sales functions in China and Germany.

Bloomberg contributed to this report.



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