Thomas Klein, the CEO of Mercedes-Benz Korea, has been promoted to oversee car product management and sales at Daimler AG’s headquarters in Germany. After completing a 2-year and 6-month tenure in Korea, he is set to return to the headquarters. Klein’s journey with Benz began in 2003 as the sales and marketing officer for DaimlerChrysler, and he held positions such as regional service head for passenger cars in Germany and CEO for Mercedes-Benz Middle East before joining Mercedes-Benz Korea in 2021.
Over the past two years, he has been instrumental in growing Mercedes-Benz Korea. In 2022, the company achieved a record of selling over 80,000 imported cars for the first time, and the E-Class became the first single generation model in Korea to surpass 200,000 units sold. Additionally, Mercedes-Benz’s sales in the Korean market ranked fourth globally.
Before leaving Korea, Thomas Klein gave an interview with the automotive journalists’ association. Here are his responses:
– What do you think is the reason that Mercedes-Benz ranked fourth in Korea’s luxury car market?
“Overall, Korean consumers have a high understanding of brand heritage, and they have strong preferences and tastes for luxury. Many customers are meticulous about high-quality materials and the overall craftsmanship. When I ask Mercedes-Benz customers why they appreciate certain aspects, they mention aesthetic appeal, the luxurious prestige, and the social status that the brand and products offer. It’s a way for them to express themselves. Furthermore, they seem to express their tastes and social standing through customization according to their preferences. At Mercedes-Benz, we strive to understand what consumers want and we create products accordingly. This effort has enabled us to offer 200,000 E-Class models in Korea and receive a good response to new models.”
– What challenges did you face while leading Mercedes-Benz Korea for two and a half years?
“It was disappointing that electric vehicle subsidy criteria changed every year. I thought, to respond efficiently, it would be better to implement changes every 2-3 years (from a corporate perspective). To deliver products to Korean consumers starting in January of the new year, we need to place orders by July of the previous year. However, due to domestic regulations, we cannot prepare the vehicles in time. The introduction of regulations for 2023 should be announced in 2022. If announcements come out at the end of January like they do now, it’s hard to respond. For electric vehicles, consumers struggled to purchase them properly during the first four weeks of January.”
– During your tenure, you successfully implemented electrification and luxury. If there’s something you regret, what would it be?
“Sales increased by 5% over the past two and a half years, but revenue increased by 45%, so I believe our luxury strategy was successful. As a result, Malaysia has risen to become the second-largest market for Maybach. While we may rank fourth overall, AMG also reached fifth globally. The focus on luxury, which is a unique aspect of the Korean market, proved effective. I am particularly proud of our achievements in electrification. I fought fiercely with headquarters to bring in more electric vehicles. Consequently, since 2021, sales of electrified models have grown eightfold, and they now account for over 10% of the market. Achieving both luxury and electrification simultaneously is gratifying. This success has been a team effort at Mercedes-Benz Korea rather than an individual one, and my successor will continue to advance it. I also regret not being able to dedicate more time and effort to qualitative improvements related to network expansion. I had planned many diverse projects with the Mercedes-Benz Korea team, but I must leave sooner than I expected due to my appointment at headquarters.”
– What significance does the Korean market hold for headquarters?
“Many people are paying close attention to Korea, but I feel there is some neglect in the domestic perspective. The Korean market has been underestimated. Headquarters is considering how to reflect the unique requirements of the Korean market in product offerings, highlighting the importance of understanding the market to accommodate it better.”
– From the perspective of electrification, who do you consider your biggest competitor?
“In today’s world, today’s competitor might not be tomorrow’s competitor. The situation is continuously unpredictable. There are around 400 electric vehicle brands in China, and there’s news that some will enter the Korean market. Therefore, it wouldn’t be appropriate to name any specific company as a competitor right now. We will continue to drive forward what we’ve been doing well so far. Our products speak for themselves in terms of their value, and many people have driven the EQS. The EQS has made a round trip from Seoul to Busan without needing a charge, which speaks volumes about its luxury, driving range, and safety. I believe the development of electric vehicles in the Korean market will continue.”
– In the past, car companies predominantly controlled 100% of the profits, but now batteries account for 30% of the total cost. How do you think Mercedes-Benz will ensure profitability with the remaining 70%?
“When new technologies are introduced, there are always cost-related challenges. However, over time, exciting opportunities for cost reductions emerge in new technological domains. In the early phases, substantial investments are required, which can affect profitability; we view it as an investment rather than a cost. We will keep striving toward this.”
Matthias Weitll, currently the head of digital services and e-commerce at Mercedes-Benz, has been appointed as Klein’s successor.
By Lee Sang-jin daedusj@autodiary.kr