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[Herald Interview] Koreans' 'discerning taste’ spurs Mercedes-Benz's growth

Automaker's CEO in Korea says German headquarters has a team dedicated to catering to Korean demands

June 21, 2023 - 16:11 By Kan Hyeong-woo
Thomas Klein, CEO of Mercedes-Benz Korea, speaks in an interview with reporters of the Korea Automobile Journalists Association at Mercedes-Benz Korea’s office in Seoul on Friday. (Mercedes-Benz Korea)

Mercedes-Benz Korea sold 80,976 units last year -- the first time an auto importer has sold more than 80,000 in a year here -- while claiming the top spot for the seventh consecutive year among foreign automakers in South Korea. Thomas Klein, who is wrapping up his 2 1/2-year tenure as the CEO of the German carmaker’s Korean office this week, says the auto brand’s success here is linked to Korean customers’ "discerning taste."

“I believe South Koreans in general, even if we take a step outside of the auto industry, have very discerning taste, very good feel and understanding for brand heritage, very high affection to high-quality materials, craftsmanship and so on,” said Klein in an interview with reporters of the Korea Automobile Journalists Association at the Mercedes-Benz Korea’s office in Seoul on Friday.

He said Mercedes-Benz vehicles' aesthetics, prestige and status fit what Korean consumers want, especially those with an affinity for luxury goods.

“It's a means of expressing your personality. The way you can customize (Mercedes-Benz cars) gives you much more opportunities to express yourself and show your social status. I think that's very particular in Korea,” he said.

In December last year, Mercedes-Benz Korea announced that the brand’s 10th generation E-Class model became the first import vehicle to sell over 200,000 units since it was released here in June 2016. Korea topped E-class sales among all other markets from 2018 to 2022.

“The attention that Korea gets worldwide, I think it is still largely underestimated in Korea. There’s a department in Stuttgart that does nothing else but transport and transform the demands of South Korea into the organization in German to ensure that what we get here as products and services meet the very demanding Korean customers’ expectations,” he said.

Since the German brand’s establishment of its Korean office 20 years ago, the Korean market has grown to be the fourth-largest market in Mercedes-Benz’s portfolio.

“Our organization has a very keen interest in Korea, not only as a market where we sell vehicles but also as a market from which we can adopt technologies and find adequate suppliers," said Klein.

"The secret of our success is that we are very attentively listening to what's going on in Korea, what Korean customers tell us and we are very willing to react to that.”

The automaker's Korean office has 60 engineers in the research and development department dedicated to figuring out what technology is working in Korea and which technology can be applied to the global stage, the CEO said. The same engineering team had about 10 people only a few years ago.

Klein underlined that there have been a lot of positive developments in the regulatory environment for ease of doing business here, especially with boosting the adoption of EVs.

“If you look at what the Korean government has done to propel the (electric vehicle) sales, it's absolutely amazing. It's really one of the most comprehensive programs I have seen to bolster the adaptation of electric mobility in the country,” he said.

But there is room for improvement. Automotive regulations in Korea tend to change more frequently than other countries, he said, and a more stable regulatory environment and earlier notice of rule changes would be appreciated.

Klein has been promoted to the head of product management and sales of passenger cars at the global headquarters in Germany and will begin working in his new position on July 1. Mathias Vaitl, who heads the German automaker's online platform Mercedes Me, as well as its digital service business and e-commerce, has been appointed as the new CEO of the Korean branch. Vaitl will begin his term on Sept. 1.