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Mercedes making aggressive plans for Chinese market

Mercedes-Benz is preparing a major product offensive to counteract lagging sales in the Chinese market, aiming 20 new or updated models at the People's Republic in the next two years, according to a report by Reuters. The plan is part of MB's so-called 2020 Initiative, which will see the Stuttgart-based manufacturer dump 2 billion Euros ($2.67 billion) into its Chinese market vehicles in a bid to boost sales to 300,000 units by 2015.
Were it to succeed, China would become the largest market for the Silver Arrow, outpacing Germany and the United States. Leading the charge will be the redesigned E-Class, which is set to launch in China this week. That will quickly be followed by the S-Class, and eventually by the GLA-Class in 2014.
Mercedes has struggled in China, especially relative to its German competition, BMW and Audi. Where Mercedes saw a mere four-percent increase in 2012 sales to 206,150 units, Audi was up a staggering 32 percent, while BMW's numbers jumped 41 percent. While some voices, according to Reuters, accuse Munich and Ingolstadt of boosting their numbers through hefty incentives, the fact remains that Mercedes was just walloped by its competitors last year.

Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

Mercedes could make EV batteries with Audi, BMW

It's not a big leap from digital maps to batteries, it turns out.The head of Mercedes-Benz parent Daimler said recently that he envisions his company working together with German automotive competitors BMW and Volkswagen to further accelerate electric-vehicle battery technology. The three automakers recently worked together to enhance their in-car maps systems. Daimler CEO Dieter Zetsche talked about "commonalities" between automakers, not the least of which is the need for all of them to achieve increasingly stringent fuel-economy requirements in the European Union, at the Frankfurt Auto Show last week, according to Reuters. While these companies have made their own inroads as far as plug-in vehicles go, they are all behind the Renault-Nissan Alliance when it comes to public deployment of electric vehicles. This summer, Daimler, Audi and BMW hooked up to acquire the Nokia Here digital-mapping service for about $2.8 billion. The triad of automakers beat out companies such as Apple and Uber to buy the entity, which was founded in 1986 as Navteq. Nokia bought the company in 2007. The acquisition makes sense as the automakers work on improving their products with features like cloud-based data to warn drivers of icy roads and traffic jams. The technology will likely also eventually be used in autonomous vehicles. Automakers working together for a common goal of improved technology is nothing new, of course. General Motors and Honda agreed in 2013 to work together to accelerate hydrogen fuel-cell drivetrain development. Earlier that same year, Daimler said it would work with Ford and Nissan in a separate collaboration to speed up the development of hydrogen fuel-cell technology. Related Video: