Mercedes-Benz Strengthens Smart Vehicle Strategy in China
A Bold Move in the Automotive Arena
Mercedes-Benz is taking decisive action to bolster its presence in the realm of smart vehicle technology, especially within China, the company’s most significant market. This strategic shift aims to reestablish its competitive edge in an increasingly tech-savvy automotive landscape.
New Partnerships to Enhance Vehicle Features
In a recent development, Mercedes-Benz has forged a partnership with Ecarx and DreamSmart, both subsidiaries of the Chinese car manufacturer Geely. This collaboration will enable select Mercedes models sold in China to be outfitted with the Flyme Auto operating system. Anticipated as the first model to adopt this system, the long-wheelbase E-Class is set to receive a facelift by 2027.
Future-Ready Innovations Ahead
According to knowledgeable sources, the initial vehicle equipped with Flyme Auto is expected to hit the market in 2027, coinciding with the E-Class facelift. However, as of now, Mercedes-Benz has refrained from commenting on this exciting development.
The Rise of Ecarx
Founded in 2017, Ecarx has emerged as a key player in developing comprehensive automotive platforms, with Geely holding a significant stake. Co-founded by Shen Ziyu and Geely chairman Li Shufu, Ecarx made its public debut on Nasdaq in 2022. Initially honing in on intelligent cockpit functionalities, the company has expanded its expertise into autonomous driving and critical automotive components.
Transformative Technologies and DreamSmart’s Role
DreamSmart was created following Geely’s acquisition of Meizu in 2022, intending to harmonize mobile and in-vehicle technologies. The company’s operational structure mimics that of Huawei, where Ecarx acts as the automotive arm while Meizu focuses on consumer tech.
In March 2023, Ecarx and Meizu rolled out Flyme Auto, first featuring in the Lynk & Co 08 EM-P. This innovative system is now making waves across multiple Geely and Lynk & Co models, signifying a vital upgrade in cockpit technology.
Addressing Sales Declines with Technological Integration
Mercedes-Benz’s recent decision to implement Flyme Auto into the E-Class points to a strategic pivot aimed at recapturing lost ground in China’s smart car sector. The company’s sales dipped to just over 714,000 vehicles in 2024—down nearly 7% from the prior year. Furthermore, sales continued to decline in the first half of 2025, plunging 14% year-on-year.
To counter this trend, Mercedes had previously allied with autonomous driving startup Momenta. Now, integrating Flyme Auto addresses gaps in its in-car technology lineup.
The Road Ahead for Mercedes-Benz
Before the adoption of Flyme Auto, Geely faced scrutiny regarding its infotainment systems’ performance. Flyme Auto is seen as a game-changer, boasting features like seamless smartphone integration and customizable user interfaces. At its launch, Meizu highlighted its ambition to integrate phones as extensions of vehicles.
Momentum Behind Flyme Auto
Since debuting on the Lynk & Co 08 EM-P, Flyme Auto has seamlessly integrated into models like the Galaxy E5 and Lynk & Co 900. By June 16, 2023, cumulative sales of Flyme Auto-equipped vehicles surged past 1.16 million, marking a successful integration with 130,000 units sold in May alone.
The launch of Flyme Auto 2.0 is underway, bringing design enhancements and AI capabilities that could set a new standard in smart vehicle technology.
Deepening Ties with Geely
Mercedes-Benz’s collaboration with Geely is not entirely unexpected. The two companies have maintained a cordial relationship since Geely acquired a 9.7% stake in Daimler for USD 9 billion in 2018, making it the largest shareholder at that time. Their ties strengthened further with a joint venture in 2020 aimed at developing Smart-branded electric vehicles.
E-Class Transformation on the Horizon
The implementation of Flyme Auto in the E-Class not only augments their collaborative spirit but may also position Mercedes-Benz favorably amidst China’s evolving automotive landscape.
Presently, the long-wheelbase C-Class, E-Class, and GLC variants in China leverage the third-generation MBUX system, which debuted in 2023.
Technological Advancements with MBUX 3.0
The MBUX 3.0 system operates on Qualcomm’s Snapdragon 8295 chip, equipped with a 5G modem and featuring three distinct screens for instrument readings, central controls, and passenger interaction. The system also includes an integrated camera for video conferencing purposes.
With capabilities like natural language processing and a database of over 2,000 voice commands, MBUX has localized navigation tailored for Chinese users, introducing innovative lane-level guidance.
Competition Is Stiff
Despite these enhancements, local brands like Li Auto and Xpeng Motors are surging ahead, incorporating advanced features such as gesture controls for lighting and doors—capabilities integrated into models like the Maextro S800.
A Promising Future with MB.OS
Mercedes-Benz is banking on its forthcoming MB.OS system to bridge the technological gap. Slated for launch in the all-electric CLA later this year, MB.OS promises frequent over-the-air updates, generative AI functionalities, and accelerated development cycles. However, its design is primarily aligned with future EVs on platforms like MMA, MB.EA, AMG.EA, and VAN.EA and will not extend to existing combustion engine models, which account for more than 80% of sales in China.
Upgrading Gas-Powered Vehicles
As gas-powered vehicles remain a central focus, prioritizing cockpit upgrades becomes essential. This collaboration with Ecarx and Meizu is a major leap in that direction.
Flyme Auto’s Features and Impact
According to Flyme Auto’s website, the system promises customizable interfaces, regional voice controls, and smooth transitions between navigation, music, and calls across various phone brands. If seamlessly integrated into Mercedes vehicles, this could dramatically enhance the cockpit experience.
Shifting Strategies in Vehicle Development
In response to local market expectations, Mercedes-Benz is increasingly relying on its R&D teams based in China. The long-wheelbase E-Class rolled out in late 2023 incorporated a high-speed navigation assistant developed by this team, which also contributed significantly to MB.OS.
Looking to Domestic Suppliers
The automaker is accelerating its collaboration with domestic suppliers. The new electric CLA will also harness autonomous driving technologies from Momenta, marking another milestone in their evolving strategy.
Challenges and Opportunities
However, the effectiveness of these modernizations hinges on efficient execution. Will these upgrades reach users swiftly enough to create a substantial impact? Can Mercedes meet the rising standards imposed by local competition?
The Importance of Customer Loyalty
While brand loyalty may still be a potent asset for Mercedes-Benz in China, fulfilling customer expectations through consistent and enriching car experiences is key to retaining their clientele.
Conclusion: Navigating the Future of Automotive Smart Technology
In a rapidly evolving automotive landscape, Mercedes-Benz’s initiatives demonstrate a commitment to enhancing its smart vehicle features, particularly in the competitive Chinese market. By leveraging partnerships with innovative firms like Ecarx and DreamSmart, Mercedes aims to integrate cutting-edge technologies that address consumer demands and re-establish its brand prestige. As they navigate this intricate path, the company must ensure that enhancements meet and exceed customer expectations to thrive amid fierce competition.
