Huawei vs. Mercedes a tale of two races

I have been discussing since about 2012 how China evolved as a tech superpower. I also wrote quite a few things about how luxury could absorb and integrate technology–or at least, how hard it actually is. Last year, I was already pointing at the branding push BYD was now decisively investing in. Still, just a few days ago, I was quite surprised at how Huawei (still mostly considered a mid-tier smartphone manufacturer) is now declaring war on Mercedes for luxury automotive.

In the following video, the Huawei Maextro S800 not only challenges the established dominance of the Mercedes-Maybach S-Class in the luxury segment but also doesn't shy away from comparing itself point by point.

Digital-native vs. Traditional incumbents

If you want to use the expression "paradigm shift," now is the time. Digital-native companies, such as the collaboration between Huawei and JAC in producing the Maextro S800, are now productive at delivering not just a lot of screen and gagdets everywhere (I'm looking at you BYD) but they integrate digital into their core luxury experience.

And because "China" the Maextro S800's pricing strategy is also notably aggressive, with models ranging from approximately €136,000 to €205,000. In contrast, the Mercedes-Maybach S-Class typically starts around €200,000, with higher-end models vastly exceeding this base price, depending on customization and optional features.

Mercedes-Benz wake up call?

That being said, Mercedes-Benz seems to have woken up. After more than ten years of trailing behind and trying to graft tech and digital to their standard car manufacturing culture and processes, Mercedes-Benz has undertaken what they sell as a significant turn around.

In collaboration with Microsoft, the company developed the MO360 Data Platform, connecting approximately 30 plants worldwide to the Microsoft Cloud, thereby enhancing transparency and predictability across its digital production and supply chain. Additionally, Mercedes-Benz introduced MB.OS, a proprietary operating system designed to provide a seamless, software-defined vehicle experience, finally allowing over-the-air updates and advanced autonomous driving capabilities. Furthermore, the company has invested in robotics firms like Apptronik to integrate humanoid robots into manufacturing, aiming to enhance efficiency and address labor shortages.

On paper this is great. In reality, it might be a case of too little too late...

Maextro S800's digital integration

On the Huawei side, the Maextro S800 already deals effortlessly with whatever tech standards there is on the market for high-end cars. Cutting-edge automotive technology through its seamless integration of Huawei's HarmonyOS? Check. Intuitive interface with advanced connectivity for all vehicle functions? Check? A sophisticated triple-screen cockpit, including a driver's instrument panel, a central infotainment display, and a passenger-side screen, facilitating multitasking and personalized user experiences. Check. Check. Check. Level 3 autonomous driving capabilities, with a roof-mounted LiDAR system to enhance safety and convenience? Check.

Luxury vs. Digital race

While Mercedes-Benz is making significant strides toward digitalization, in contrast, digital-native companies inherently operate at full speed and now only have to catch up on design and better understanding what luxury means. Maybe Huawei is not 100% there yet but it seems they've mostly bridged the gap. The question now is which is the faster race: racing to reboot a multinational traditional company's culture as digital-first or understanding with taste and subtlety what is luxury?

As a final note, regrading the luxury question, I must admit I don't have the latests sales figures, but.... back in 2021 the global sales of Mercedes-Maybach vehicles reached 15,730. Among these 10,800 units where sold in China.

So, maybe in this digital vs. luxury catch-up race discussion we should carefully weight who is in better position to understand who decides about what is luxury in 2025...