With increasing competition from budding Chinese automakers, the city of Shanghai is playing an integral role in the future of the world's established car manufacturers. Mercedes-Benz is no exception the company's Chief Technology Officer Markus Schäfer told Newsweek during a roundtable conversation at the automaker's technical center in Sindelfingen, Germany.
In 2018, there were 625 multinational companies with regional headquarters in Shanghai. Those hubs are complemented by 426 foreign-funded research and development centers. The city has the highest GDP of any city in China, growing 8.3 percent in 2021 and 5 percent in 2023 (a 0.1 percent dip occurred in 2022) according to Statista.
In 2022, Mercedes established a new research and development center in Shanghai that works hand-in-hand with the company's Beijing operations. Its personnel were tasked with focusing on connectivity, automated driving and software and hardware development upon opening.
"The focus in Shanghai is more entertainment and ADAS [advanced driver assistance systems]... [Mercedes is] integrated in the very progressive scheme of the city of Shanghai, [and it offers] areas for test drives for Level 2, Level 3, Level 4 [ADAS]... We have this Level Four car right now on the road doing test drives in Shanghai," Schäfer said.
The Society of Automotive Engineers (SAE) defines Level 2 driving automation as technology that has steering, acceleration and braking support for the driver while they are in control of the vehicle at all times. Level 3 builds on that, with the driver not in control of the vehicle at all times, but able to take control when the system requests it. Level 4 goes further with a vehicle unable to be controlled by a driver, and sometimes without a steering wheel or pedals.
Schäfer calls the talent pool of Shanghai "best in class," saying that "you're in the middle of everything, and you feel every time the beat drops, and that's so important," admitting that it's hard to feel that in Sindelfingen.
"You have to be in the middle of it. You have to feel the speed every day, and then you work with this kind of speed and with this kind of agility," he said.
The tasks at hand are part of Mercedes' larger vertically integrated vehicle production philosophy that sees software and hardware controlled by the automaker rather than suppliers. To do this, the company has streamlined vehicle development and production, which will be exemplified by the forthcoming CLA-Class model, scheduled to debut in 2025.
"After the chip crisis, we have much more resilient because we know what we have in the car, Schäfer said. "The complexity has gone down dramatically because we have one or two chip or three chip families, basically. And we control the software. And now every change to the car, every new product, every update that constantly will come over the air."
In April 2025, Mercedes will open a new building on the company's R&D Centre Shanghai campus for advanced hardware and software facilities, "designed to accelerate local development in cutting-edge digital innovations," the company said in a press release.
This is on top of the company's other commitments to Shanghai, including the first Maybach Atelier, which opened in 2022 in the city's Bund Finance Center. China, a country with high luxury goods demands, and one of Maybach and Manufaktur's (the customization arm of the company) key markets.
The Atelier relies on virtual and physical sales formats to reach customers. They are linked with the aesthetic, craftsmanship and customer service that Shangahi's elite expect from an automaker that wears the Maybach badge.
"Building on Mercedes‑Maybach's global success over the years, especially in China, it is only natural for us to open the world's first Maybach Atelier in Shanghai. In Shanghai, a city bursting with creativity and inspiration, we are bringing Chinese customers the finest experience through Maybach's utmost attention to detail and state-of-the-art technology," Daniel Lescow, head of Mercedes-Maybach told Newsweek.
"With the Maybach Atelier we continue to build on the brand's pioneering aura and creator DNA to develop unique moments, in alignment with our customer's lifestyles. With this new, dedicated retail concept we celebrate artistic interpretations of how we elevate the Maybach excellence to magic, creating moments that represent the brand's rich heritage and progressive future," he said.
The Atelier includes salons privés, physical and digital art programs and 3D haptic configuration capability.
Mercedes chose 2024's Shanghai auto show to debut their expanded partnership with luxury clothier Moncler. New art, a limited edition G-Class and capsule fashion collection were part of the initiative. The "Mercedes-Benz Project G-Class Past II Future" art piece was created in collaboration with fashion designer, music producer and creative director NIGO and inspired the limited-edition G.
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