Bloomberg News

Mercedes Plots Tailor-Made C-Class Offerings in Global Push (2)

March 13, 2014

Mercedes-Benz C-Class

Attendees view the Daimler AG Mercedes-Benz C-Class after the unveiling ahead of the 2014 North American International Auto Show in Detroit, Michigan, on Jan. 12, 2014. Photographer: Daniel Acker/Bloomberg

Mercedes-Benz, the world’s third-largest maker of luxury cars, plans to add variants of the best-selling C-Class beyond sedans and wagons as it seeks to better target customers across the globe.

The Daimler AG (DAI) unit will build the model, which goes on sale in Europe this month and the U.S. in September, on four continents for the first time. The broader production network will help Mercedes be more flexible to consumer demand as it seeks to close the sales gap to Bayerische Motoren Werke AG (BMW) and Volkswagen AG’s Audi.

With C-Class production sites in Germany, the U.S., South Africa and China, “we can offer tailor-made models for the different markets,” Ola Kaellenius, Mercedes’s sales chief, said in an interview during a test drive event near Marseille, France. “The trend for further variety continues.”

Mercedes, which lost the top spot in global luxury-car sales to BMW in 2005 and fell to third behind Audi in 2011, intends to retake the crown by the end of the decade. The strategy, which includes new entry-level models like the CLA four-door coupe, has helped the brand grow at a faster pace than competitors in recent months.

The 35,560-euro ($49,470) C-Class, which accounts for about 25 percent of Mercedes sales, is key to that effort. The Stuttgart-based automaker has upgraded the vehicle with touchpad technology and an iPad-like display to lure younger customers. It’s also equipped the car with technology from the flagship S-Class, including six radar sensors, to enhance safety features.

More Versatile

“Diversifying the model line further makes sense,” said Frank Schwope, an analyst with NordLB in Hanover, Germany. “The customer is king, and they’re always looking for new variants.”

Daimler’s shares rose as much as 1 percent to 66.81 euros and were up 0.6 percent at 10:08 a.m. in Frankfurt. The stock has climbed 46 percent in the past 12 months, valuing the company at 71.1 billion euros.

With two front-end designs, a stop-and-go pilot offering partially automated driving and an optional Burmester surround-sound system, “the new C-Class is more individual and versatile than ever before,” said Kaellenius. The car “gives our competition some food for thought.”

Production of the C-Class began in Bremen, Germany, in February. Assembly in East London, South Africa, starts in May, followed by Tuscaloosa, Alabama in June and Beijing this summer.

Four Weeks

The addition of production at Mercedes’s factory in Alabama will cut wait times for the model in the U.S. by four weeks, giving the brand an edge in its biggest market compared with the predecessor, Kaellenius said. Rival models such as the BMW 3-Series and Audi A4 aren’t produced in the U.S.

After rolling out the sedan and wagon this year, other variants, which may include a convertible, will follow starting in 2015, the executive said. Mercedes, which targets operating profit margins of at least 10 percent compared with 6.2 percent last year, is also introducing the GLA compact sport-utility vehicle and S-Class coupe this year.

“We see a lot of momentum in the brand,” Kaellenius said, while winding past the turquoise waters of the French Riviera in a white C-Class. The revamped small sedan is “important for us, volume-wise and also for our profitability.”

To contact the reporter on this story: Dorothee Tschampa in Frankfurt at dtschampa@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net Chris Reiter


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