A year ago, Mercedes-Benz CEO Dieter Zetsche sent a letter to his employees claiming that the three-point star brand must regain the top spot that it lost in 2005 in the premium segment.
“We are Daimler – we should be ahead of the pack!” proclaimed Zetsche who added at the time that in no way should they “be content with a solid second or even third place”.
Unfortunately, Mercedes’ global domination plan doesn’t seem to bear fruit. If anything, the company has fallen even further behind BMW and Audi, which are the number one and two premium carmakers in the world respectively.
It’s not that sales are faltering: Mercedes-Benz delivered 964,900 units worldwide in the first nine months of 2012, a five percent increase over the same period in 2011.
Which would be good news if Benz's rivals’ sales hadn’t increased at an even higher rate; that’s the reason Mercedes is trailing second-place Audi and segment leader BMW by 132,600 and 145,000 units respectively.
Zetsche plans to rectify the situation with the introduction of more affordable models, such as the CLA four-door coupe and the GLA compact crossover, and expanding the range of the all-new S-Class that will be launched next year.
Moreover, demand for the new A-Class is quite high: the premium hatchback has nearly 70,000 orders since its launch last month despite being €7,000 more expensive than the VW Golf. Mercedes expects the A-Class to be a wild success, and it has made a deal with Finland’s Valmet to produce more than 100,000 extra units.
“We have holes in our portfolio that we are closing successively”, Mercedes’ sales chief Joachim Schmidt told Bloomberg. “When I look into the future, I see that we have excellent prerequisite to be the leading premium manufacturer by the end of the decade”, he added.
China, where Merc's sales have grown by 6.7 percent this year compared to more than 30 percent than its two direct rivals, is one of the issues that the automaker needs to resolve.
To do so, Schmidt said that the company will restructure its operations in order to grow “significantly”. IHS predicts that between 2012 and 2015, Mercedes sales will increase by 34 percent compared to BMW’s and Audi’s 26 and 12 percent.
By Andrew TsaousisStory References: Bloomberg