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Mercedes calls CLA 'best launch in 20 years' as it warns dealers of tight supplies

It's still in the early going, but it's looking more and more like the 2014 Mercedes-Benz CLA is a verifiable home run for the German brand. According to a new report from Bloomberg, the new small car isn't just widening the sales gap between Mercedes and BMW, it's attracting a new, younger breed of customers into the brand's showrooms. But that early success is straining supplies of the turbocharged four-door.
Dealers have been warned that the first half of 2014 will see limited supplies for CLA, with a letter to dealers indicating that "tight inventories and low days supply" will exist from February through June, despite the car's Kecskemét, Hungary plant running at full tilt.
"This is our best launch in 20 years," said Steve Cannon, the US boss for Mercedes. "The CLA has been a phenomenal success right out of the gate." The numbers certainly support that. We reported in early October that Mercedes moved 2,300 CLAs in its first week on sale, and now Bloomberg is saying CLA sales were almost singlehandedly responsible for Benz's November sales gains. Mercedes' annual sales are up 14 percent through the November, and it's enjoying a healthy 7,600-car lead over BMW.

Automakers face reality of EVs' cost — to jobs, and their bottom line

Related: We obsessively covered the Frankfurt Motor Show — here's our complete coverage FRANKFURT, Germany — European car bosses gathering for the Frankfurt auto show are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine. As the latest such announcement by China added momentum to a push for zero-emissions motoring, Daimler, Volkswagen and PSA Group gave details about their electric programs that could give policymakers some pause. Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned — forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs. "In-house production is almost irrelevant to the consumer," Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt Motor Show, in the midst of a German election campaign in which automotive jobs have loomed large. The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars. "Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins," said Bernstein analyst Max Warburton. "It was brave to go first — but of course it won't be the last." Volkswagen, for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like Volkswagen must lead, not follow," Chief Executive Matthias Mueller told reporters. VW diesel emissions-cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all engines. TIGHTENING NOOSE Tesla shares jumped nearly 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars, tightening the noose around the combustion engine. France and Britain have promised its outright abolition by 2040. But PSA, the maker of Peugeots and Citroens, said it was concerned about the risks if consumers were left behind in the rush, and a new generation of battery cars does not sell.

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.