One-child, improved life, no cram school, rich interests, parental welfare housing, 30 years less struggle… Only after having two kids did I realize that the 90s generation was the happiest generation in childhood. Look at the brand-new furnishings in the house, the high-rise buildings that block out the sun, and only me and my lemon car are left around from the decades.
Octavius, my first car, not rare, no visible nominating history, how common he is compared with its unspeakable experience. Officially, the oldest 140 is 30 years old this year, but recalling 1993, the year Octavius and I were born, everything is still in sight.
From Russia with love
One noon in winter of 2015, an WhatsApp notification appear on my phone: Your S 600 is from Russia.
I put away the unfinished wheat spicy chicken wings and returned to the workshop from the countryside McDonald’s. At that time, I was part-time my restoration shop . Open the laptop and log in the EPC that has not been subscribed for a long time, hurriedly check what I have overlooked. The night before, I sent the VIN of Octavius to my new mentor Christian. After the college entrance examination in 2012, my parents paid for this S 600 produced in 1993 for me.
If I post “My S 600 is Russian-spec”, I will probably be ridiculed as “Yellow Russian”, and even scare some people, because this statement is almost nonsense. Even though Russia is the place I dropped by sometimes , the car with the Hangzhou license plate under my crotch has nothing to do with it.
On the same day, I learned that the order number in the EPC has 3 digits representing the region where the order was placed, and “524” is Russian Federation. My experience at that time still couldn’t recognize the basic information. The difference between the last 600 SEL and the first S 600 every day was my full level. This discovery made me learn from the pain. Together with Christian, we accumulated knowledges.
Tax exemption is the sin
In the days when I was planning to write the book with Christian, the summary of the special chapters in the Chinese version was like an anglerfish with a huge head and tiny tail. This car, which was manufactured from 1986 to 2000, has news every year, but when it comes to China, it is difficult to evenly divide the number of words every year. What happened in 1993 is more than the sum of the seven years before and after.
IIn 1993, the sales volume of S-class sedans in China showed a geometric growth, with 4111 executed orders in China, ranking first in Asia and third in the world, which was 239% of the previous year. Correspondingly, in the first half of 1993, the growth rate of the GDP was 14.1%. In order to attract foreign capital, China has formulated special policies for foreign joint ventures and wholly foreign-owned enterprises including Hong Kong, Macao and Taiwan since 1992. All foreign-funded enterprises in China can import or purchase imported cars duty-free according to the investment scale. Duty-free vehicle business rapidly build.
The first owner of Octvius was “American XUNFA International Enterprise Corporation Hangzhou office”, the name sounds a bit shell. The car has a black license plate, but the owner may not be a foreigner.
A duty-free car owner told me that he bought a 600 SEL in 1993 at cost of ¥1,500,000, and a “black plate” at fee of ¥150,000. Another car owner who paid full tax spent nearly ¥3 million (appox $348,800) on the purchase of the S 600 in the same year. The demand for imported cars and the high tax of 220% make reselling duty-free cars very profitable. Reselling duty-free cars has become the primary purpose of setting up foreign shell companies. The number of duty-free cars exceeds 20% of the share of imported cars, most of which include luxury vehicles including S-class. In December 1993, the company under the name of the first Ferrari owner in China was caught for reselling 43 duty-free cars.
The shortage of foreign exchange even jeopardized the economic plan of the Chinese authorities, and the auto industry, including Shanghai Volkswagen, was in trouble. On January 1, 1994, China changed the dual exchange rate system to a single exchange rate system, and the official exchange rate to US dollars depreciated 33% from the previous day. Intervention came quickly. In the end of 1993, the news that the duty-free car policy was about to be abolished spread to the market, causing another wave of panic buying, and used cars and repaired cars were quickly sold out. The registration date of Octavius is January 1994.
The booming 1993 overdrawn the short-term demand for S-class. In 1994, the sales of S-class in China plummeted by 65.1%, to only 1,433 orders. The “black plate car” is still there, but the tax exemption is gone. This rare historical opportunity tells us that we must make money as early as possible. Also, bookmakers make mistakes too.
DPRK also joined imperialism
In 1986, Mercedes-Benz (China) Co., Ltd. was established in Hong Kong, which had not returned to China before 1997, essentially a foreign company abroad. It mainly does business with the Chinese authorities. When import car dealers appeared in Shanghai and Guangdong earlier than official dealers, the biggest competitor of Mercedes-Benz (China) was not BMW, but more than 200 LHD car dealers in Hong Kong who also whosale S-class.
Hard currency exchange, license plate… The eligibility to buy a car is more important than the car, and the relevant departments have no requirements on the source of the car. Although Hong Kong is the best place to buy a car, it is not necessary to order a Mercedes-Benz from Mercedes-Benz (China) Co., Ltd. in Hong Kong . What’s more, there are no China-spec in the first place. The essence of the high similarity between Chinese 140s is the few lines of SA codes selected by the sales company after the market investiagion.
In the 1993 annual report and the Geneva speech in March 1994, the Chinese and Russian markets were named and praised. Before Daimler knew it, sales in the East were starting to spin out of control.
A considerable part of the supply of import car dealers in China comes from LHD car dealers in Hong Kong, but Hong Kong dealers do not produce cars. Apparently, Mercedes-Benz (China) was reluctant to share profits with its competitors, and the Hong Kong dealers had to go to other countries to find cars with price that could be resold to China and still make profit. This caused the sales numbers of S-class to China in 1993 is way more than Daimler AG awared.
According to the statistics of existing vehicles in the past five years, Chinese orders accounted for 62.7% of the vehicles registered in China in 1993. In other words, more than 2,000 S-class cars sold in China originally belonged to other countries, and the actual orders placed by Chinese buyers in that year exceeded 6,500. Compared to the global sales of less than 50,000 S-class cars in 1993, it’s considerable. These data are not enough to change the third place in the Chinese market, but it is a loss for Mercedes-Benz (China). Mercedes-Benz’s sales network in China did not gradually expand until the second half of 1993, and in 1995 it finally had an office in Beijing.
In 1993, 3,070 orders for S-class were executed in Russia, a year-on-year increase of 770%. The excess of S-class cars on Chinese roads is a better explanation than Russia’s 13% contraction in economic indicators. In my statistics of “non-China-spec”, Russian S-class accounted for 10% of China’s total in 1993, German-spec ranked second accounted for 5%, and there were many fragmented countries. The sample is relatively rough, not necessarily an accurate proportion, but just reflects a trend. Overall, for every 10 S-class sold in China in 1993, one was a resold Russian order.
If you describe the S-class cars of various countries in the Chinese market in 1993 as the imperialist conquest, you will find that China became the real S-class party, batch resale orders to China. Suppliers have different perceptions of the Chinese market, although the North Korean sales company has made a correct judgment on the black paint that is popular in the Chinese market, it seems that in order to pursue the quantity of purchases, they are even manual, thus the sales is poor.
Among the dozens of countries that have dumped S-class to China, the Russian cars are the best copied. Whatever is available in China-spec, Russian cars cannot be missing. And they will not add anything unnecessary. For V12 models with more standard options , it is finally to the point where the naked eye cannot distinguish them .
Ready-made China-spec can serve as a reference: usually equipped with four power seats, 540 sunshade of the rear glass. Defensive options also include 481 underbody protection, 524 paint anti-corrosion and 828 elemination of CAT. It can be seen that even if you place an order with Mercedes-Benz (China), there are not many choices. Why not try to turn to the light.
The fleeing of Russian cars is not because Hong Kong businessmen went to Germany to pick up ready-made cheap ones. Before the order was created, the Russians knew that the car would be betrothed to the owner of the “Khitan” and hid the dowry.
Oligarch automobile
No longer a household name, Boris Berezovsky was once the most famous Russian oligarch. In 1989, Berezovsky and his partners founded LOGOVAZ to sell LADA produced by VAZ.
The main business of LOGOVAZ is car re-export. Berezovsky, who was born as a mathematician , was aware of the expectation of currency depreciation, and signed a contract with VAZ in the name of export at a price lower than that of domestic sales, with a loan period of one year. LOGOVAZ exports and then imports the LADAs in the paperwork. The sales are charged in US dollars, and after the depreciation of the Russian Rouble, the car payment is paid to the factory in Rouble. Every time LOGOVAZ sells a LADA, VAZ loses 30% of the wholesale price.
At the AutoService-91 exhibition on April 10, 1991, the new S-class was exhibited in Moscow. Mercedes-Benz signed an agreement with LOGOVAZ and MosRentService , authorizing two dealers to sell S-class in the USSR. In January 1992, LOGOVAZ was unveiled at the Mercedes-Benz Service Center in the south of Moscow, becoming the first authorized showroom in Russia. They mostly deal with S-classe, Grand Cherokee and “imported” LADA.
According to records, LOGOVAZ in the early days of its establishment could only sell 10-12 Mercedes-Benz per month in Russia, and by 1998 it was only 25-30. But during 1993, Russian dealers placed a total of 3,070 S-Class orders with Mercedes-Benz.
In the control code of the representative region of Mercedes-Benz, there are two countries “524 Russia” and “575 USSR”. Judging from the evolution of the order, the two are not a straightforward replacement relationship. Of the 3,070 orders, 995 were placed in the title “USSR”, while “Russia” also sold 2,075. LOGOVAZ and MosRentService are the only two dealers who authorized in the “USSR” era. The 995 USSR orders in 1993 are likely to come from these two companies. It is conservatively estimated that the USSR orders accounted for 5% of China in 1993. According to the inference that 6,500 vehicles were sold in the whole year, the number of USSR orders can reach 325, which is not even high among the 995 vehicles.
In 1996, a journalist visited Germany and the Netherlands and came to the conclusion that “for every S-class sold by an official dealer in Moscow, 9 identical cars also went to Russia after several twists and turns.” After I conducted a sample survey of 3,500 vehicles based on the data of GIBDD (Main Directorate for Traffic Safety of the Ministry of Internal Affairs of Russia), I found that the 140 registered in Russia only accounted for 10.3% of Russian orders. This journalist is really precise. The formation of this ratio is due to the fact that Russia has a large number of used cars from Western Europe on the one hand, and on the other hand, only a small number of Russian orders are actually delivered in Russia. Russian orders are the harem of other markets.
In addition to China , there is Japan where Russian orders have left their footprints. According to a sample survey of 1,000 140s in Japan, the proportion obtained is that Russian orders accounted for 2.7%, far lower than the 7.7% of German orders, German local dealers re-exported more S-class to Japan. Interestingly, the Russian orders showed a higher level of specialization.
I once had a 1997 S 500 L as a parts donor, which may have passed through Germany-Russia-Japan, and finally entered tChina by detour. Although it is a Russian order, it is equipped with 341 additional turn signal lights on fenders that are subject to Japanese regulations and 772 AMG body components that cater to the Japanese market. All Russian orders sold to Japan equipped with catalytic converters, but those sold to China are not. There are 8 identical cars ordered from Russia, only 2 are actually registered there. In contrast, even though there are many German orders in Japan, it is often necessary to install fender turn signals after delivery.
In any case, Daimler would not be unwise enough to accept the 90s Roubles. The popularity of Russian orders in the Chinese market may just be the result of profit-seeking by Russian dealers including LOGOVAZ.
All history are based on limited information, please email me if you have doubts about the veracity of this article. If you want to quote the content of this article, please contact me in advance, please do not use my text for any commercial purposes.