Mercedes-Benz Continues its Decline on the Global Luxury Market

After reporting news that MBUSA was ahead of BMW in U.S. Sales, recent reports from Bloomberg have emerged that Mercedes-Benz is not in the same position on the global market. In global luxury sales, Mercedes-Benz is falling further behind rivals BMW and Audi because of a disjointed strategy in China, sluggish expansion of entry-level models and an aging S-class sedan, the once-dominant upscale nameplate remains firmly in third place.

The Mercedes sales gap with second-placed Audi has more than doubled within a year, hampering Chief Executive Dieter Zetsche’s pledge to retake the lead.

“Mercedes’s problems are home-made problems,” said Christian Ludwig, an analyst with Bankhaus Lampe in Dusseldorf. “It’s going to be extremely difficult for Mercedes to reach the No. 1 spot. The others are not sleeping.”

Mercedes delivered 964,900 cars and sport-utility vehicles worldwide through the first nine months of 2012. The 5 percent gain failed to keep pace with rivals, meaning it lagged Audi by 132,600 vehicles, up from 53,900 a year ago. The gap to No. 1 BMW widened 41 percent to 145,000 vehicles, according to data from the carmakers.

In September 2011, Zetsche sought to cap the celebrations for the automaker’s 125th anniversary by setting the goal for Mercedes to become the best-selling and most profitable luxury-car brand by 2020. At the time, he said it was “impossible” for the brand to accept being third....
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shabaru - 10/10/2012 3:27:50 PM

+1 Boost

There was a time when selling those were like finding a needle in a hay stack. Now they sell like hot cakes. :D

Yonder7 - 10/10/2012 1:34:28 PM

+3 Boost

I like MB but IMHO, they will never be Number 1 cause as Luxury line the price of their products is, most of times higher, as an example Golf at 17k Euros and A class at 24k ....The Only way will IF the keep all the luxury cars and also start to build cars that everybody can buy (cheap cars)..I think is not going to happen...

cidflekken - 10/10/2012 1:51:11 PM

+3 Boost

Have to agree with others. Luxury marques shouldn't be expanding their entry-level offerings in order to increase sales. The lower-level products are no better than products offered by VW, Honda, or Toyota, et al. They also need to realize that they are diminishing the prestige of owning their brand.

Car4Life - 10/10/2012 1:54:11 PM

+1 Boost

Benz understands that the financial crisis going on in global markets Audi & BMW are "winning" in will not provide stability long term which is why they have invested wisely and heavily in North American Markets.

While Audi and BMW continue to play leap frog, Mercedes is going for dominance

Yonder7 - 10/10/2012 2:46:56 PM

+1 Boost

Car4Life; your logic looks flawless but not sure about that..

GermanNut - 10/10/2012 3:30:34 PM

+2 Boost

Mercedes-Benz has the wrong global strategic plan.

China is the largest car market in the world and has seen huge sales growth in the past 5 years but Mercedes does not have the proper network to keep up with demand. With over a billion people, GDP growth of 7% (which the Chinese consider slow), and a rapidly growing middle class, China is the new "hot spot" for luxury car manufacturers.

Mercedes-Benz's focus on the North American market leaves it without a strong presence in emerging markets which are seeing large amounts of new wealth creation (which means new potential customers).

Mercedes-Benz charges more for their cars than BMW and Audi on average. Mercedes-Benz does not deliver that "extra" value in terms of ownership experience, hence it loses sales to BMW and Audi that charge less, but offer at least the same, and in many cases, a better value.

Car4Life - 10/10/2012 4:05:40 PM

+1 Boost

"As the World Bank downgraded China's growth rate to 7.7% in 2012 and 8.2% in 2013 from 8.6% earlier in the week, current Chinese policies to stem contraction in China have also failed.

Any forecasts on the Chinese economy, according to Zarathustra, will depend on what the government will do. "The government should be able to generate GDP growth at costs, at least theoretically speaking, but the firepower that is required this time will be greater than last, in our view."

Johnel - 10/11/2012 1:28:15 PM

+2 Boost

Perhaps the German marks should improve their reliability and stop milking its customers for options that should be standard at the price they sell their cars. A Lexus may not handle as well as a German car, but at least you get your money's worth.

randy3023 - 10/11/2012 5:47:59 PM

-1 Boost

Mercedes-Benz has priced themselves out of everyone's market.