Mercedes Adjusting to U.S. Market
December 16, 2009
Although sales have rebounded with the flattening of the recession, premium-brand automakers continue to struggle in the U.S. and almost all are scrambling to adjust their priorities and business models.
Mercedes-Benz USA is coming up with some new ideas and so are its dealers, said Ernst Lieb, CEO of Mercedes-Benz USA, in a meeting with media in Detroit this week.
Think Mercedes only is giving lip service to thinking outside the box? Consider these moves:
- Mercedes dealers will begin selling commercial vans - the Mercedes-Benz Sprinter (the Dodge Sprinter prior to parent Daimler AG's split with the now Chrysler Group LLC) - on January 1. Lieb says about 110 Mercedes dealers will retail the van in a special outside display area, as is Mercedes' custom for marketing the Sprinter in other countries.
The move to continue with the Sprinter will help Mercedes continue its presence in a projected growth market. Ford Motor Co. recently introduced its Transit Connect as the first of a new generation of smaller-footprint models aimed at the segment. Nissan Motor Co. Ltd. also has strong plans for the light-commercial market, as does Mercedes' former partner Chrysler, with a new entry sourced from new partner and managing owner Fiat S.p.A.
- The company will lease a small number of fuel cell-powered B-Class subcompacts. It will only be a couple of hundred, but the fully electric B-Class will help Mercedes establish a footing and bolster its environmental credentials. More details on Mercedes' fuel-cell car can be found at AutoObserver's sister site, Green Car Advisor.
- Mercedes-Benz last week confirmed it will build the next-generation C-Class sedan in the U.S. It was a charged announcement certain to rile the labor union at home in Germany, but the company insists it must have options to soften the impact of currency exchange-rate fluctuations. When the next-generation C-Class begins U.S. production around 2014 at the company's Mercedes-Benz U.S. International assembly plant in Tuscaloosa, AL, something on the order of 200,000 to 250,000 vehicles will be manufactured on U.S. soil - a number exceeding Mercedes' total current U.S. sales.
- Despite the tough economy, Lieb said 140 of its 357 U.S. dealers remodeled or built new buildings to fulfill the company's new dealership standard and another 150 are slated to do so this year. He also said Mercedes-Benz dealers have "tightened their belts" during the prolonged U.S. sales downturn and now will be positioned to profit markedly when the market improves.
Lieb also said Mercedes came through the difficult past 18 months of economic turmoil far better than it might have thanks to having a captive finance arm. Without Mercedes-Benz financial, he said sales would have declined even more. He mentioned the inability of General Motors Co.'s Cadillac brand to compete during the downturn because of the financial difficulties at is former finance unit, GMAC, that made it all but impossible to offer leases, a critical sales tool in the luxury market.
Lieb did not provide a sales forecast for 2010 but said Mercedes-Benz is hoping for a more predictable sales environment rather than the "hot and cold showers" of 2009. - Michelle Krebs, Senior Analyst and Editor at Large
Photos
1 - Daimler will build some Mercedes-Benz C-Class models in the U.S. beginning in 2014.
2 - Some Mercedes-Benz dealers will begin selling Sprinter, previously sold as a Dodge, beginning in 2010.
3 - Mercedes will sell in small numbers a fuel-cell vehicle to U.S. retail customers next year.
Posted by Michelle Krebs at 4:12 AM under Business , Companies | Comments (0) | digg this | Seed Newsvine
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