It is a close race, one that likely will not result in deep price cutting to move models, but is certain nevertheless to be on the minds of executives employed by two automakers until the clock strikes midnight for the final time this year. What the race is all about is this: the perennial sales battle between two German automakers, BMW and Mercedes, with BMW expected to pass Mercedes in world sales totals for 2005. The ramifications are strong for each automaker and will set the tone for the way each company produces and markets vehicles from 2006 forward. Mercedes finishing second to BMW is not a comfortable taste for DaimlerChrysler, parent of Mercedes and now owner of The Chrysler Group, maker of Jeeps, Dodges, and Chryslers. Only Volkswagen sells more cars than either make, but when it comes to a predominately luxury line up Mercedes and BMW battle alone amongst German makes with Audi a distant third. Unlike American automakers, Mercedes is not likely to engage in deep price cuts to attract customers and "steal" sales that they would have made in 2006 for 2005 to stave off BMW. Still, purchasers of Mercedes vehicles should find an even friendlier showroom in which to shop when they negotiate the price on their "C", "E", or "M" Classes of vehicles. So, exactly what has caused the shift in sales? Well, published reports indicate that Mercedes sales continue to rise, but slowly. On the other hand, BMW sales increases are in the double digit category which is what has pushed BMW ahead of Mercedes so far this year. Oddly, it isn't the luxury cars in each automakers' fold that is spelling the difference. Unknown to many Americans, both BMW and Mercedes sell cars that are smaller and less luxurious than the cars that appear in the states. Cars that compete squarely against Volkswagen's Golf and offerings from GM, Ford, several Japanese automakers, and others. Yes, it is true. Not all BMW or Mercedes models are luxury cars. Unlike in the US where a Cadillac is exclusively a luxury car, both German brands produce cars for the rank and file driver too. It is these types of cars that have fueled both automakers growth and is likely behind BMW jumping ahead of Mercedes. To counter BMW's surge, Mercedes does have an ace up its sleeve: the introduction of one or two smaller lines of cars to the U.S. market by 2007. If you haven't figured it out yet, Mercedes has "A" and "B" Class cars that are smaller and less expensive than the current "baby" Mercedes, what we call the "C" Class. Mercedes hopes that the US market is ready for less pricey cars sporting the venerable Mercedes name and that these sales will propel Mercedes back into the lead. Of course, what is good for Mercedes is good for BMW as the automaker explores bringing its "1" and "2" series cars to the US to compete for sales. Both lines of cars are positioned against Mercedes "A" and "B" class cars and are the same cars that have bumped BMW's sales figures up. Now if only Mercedes would consider importing it's SMART car to the US market... |
