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Future models - Mercedes-Benz - E-class - All Terrain

Benz E-Class All Terrain a ‘fair bet’ for Aus

On track: A jacked-up version of Mercedes’ E-Class would not be a big seller in Australia but would offer a particular group of customers an alternative to the hugely popular SUV.

All Terrain E-Class all but confirmed to go head to head with Audi A6 Allroad

Mercedes-Benz logo29 Jul 2016

By DANIEL GARDNER

MERCEDES-BENZ is looking increasingly likely to challenge yet another of its rival’s niche model monopoly in the Australian market, with the go-anywhere All Terrain version of the E-Class highly likely to be offered Down Under.

The high-riding version of the German car-maker’s luxury wagon was made official last month and will go public at the Paris motor show in September, but at the time of its confirmation the All Terrain’s feasibility for Australia was uncertain.

However, in the ensuing weeks, Mercedes has been building the business case for the variant in the local market and the prospects are looking good according to Mercedes-Benz Australia/Pacific senior manager of public relations, product and corporate communications David McCarthy.

“I think it’s a pretty fair bet that we will take All Terrain,” he said. “We are very, very interested in the vehicle. I think it’s an opportunity for some extra sales.”

Mr McCarthy explained that, if confirmed, the company would not expect the All Terrain to be a major seller in its line-up, but Mercedes had concentrated on increasing the profile of its wagon models and the high-riding E-Class would also benefit.

“E-Class Estate does not sell in big numbers, C-Class Estate does quite well — probably 10 per cent of C-Class sedan so that’s higher than what our competitors do. One of the reasons is we have put a lot of effort over time, since the previous C-Class, into Estate.”

With more off-road ability than an E-Class Estate but the same practicality and flexibility of the wagon, the All Terrain would go head-to-head with Audi’s equivalent A6 Allroad and Mr McCarthy made no secret that the company would be aiming to steal sales from the four rings.

“Audi has done well with the Allroad – again relatively small numbers, but they have done well. That’s a market they have developed. The Audi does good numbers and we want a slice of that pie.”

Mercedes’ C-Class sedan continues to be its top-selling car but its most recent SUV, the GLC mid-sizer, is closing in. While SUV trade strengthens, Mr McCarthy said an All Terrain buyer is a different breed of Mercedes customer.

“I’d hazard a guess that if you sold say 50 All Terrains I think you would see a lot of them at the snow. Probably 50 per cent,” he said.

“You don’t see 50 per cent of our SUVs at the snow. People buy SUVs for a whole range of reasons vision, child safety seats are easier and at Bunnings. An Estate buyer is different and they have actively not considered an SUV so I think the All Terrain is a good opportunity.”

With a strong presence in the market and repeated strong results in the monthly VFACTS national registrations data, Mercedes has the might to test the water in niche, perhaps not volume-selling segments, but Mr McCarthy said each of its variants had to earn its keep.

“E300 Bluetec Hybrid: the business case for that car is 100 units a year, which it did. C300 Bluetec Hybrid is the same. S300 the number was lower but we met it. I can’t speak for all brands but we don’t do loss leaders. It might surprise people, but we are in business to make money.

“Each car has to stand on its own merits so the business case we make for the All Terrain – there will be a figure we need to sell to recoup the compliance cost, the training cost, the parts cost, all that stuff. When you make that commitment you stick with it.”

Mr McCarthy also explained that remaining in a niche segment for a long period maintained customer satisfaction and can gradually grow the appeal of an unorthodox model beyond niche status, using the high-performance AMG C-Class wagon as an example.

“C63 Estate: it’s been doing about 40 a year but this year it will do about 60 or 65… but someone doesn’t buy an Estate because they can’t get a sedan. It’s a matter of filling that niche.”

Unlike some other brands in Australia, the key three big Germans all have factory-owned dealerships in either Melbourne or Sydney and Mr McCarthy said the presence of the retail facilities allows the brands to more closely monitor and respond to the demands of the Australian market.

“BMW, Audi and Mercedes all have one thing in common – we all operate a retail dealership and that has an advantage in that you are a lot closer to the customer. Customer feedback and dealer feedback pays.”

That proximity to the dealers and customers allows Mercedes to more accurately gauge what the market can support, which mitigates some of the risks associated with introducing a low-volume model said Mr McCarthy.

Mercedes is known for taking inspiration from other car-makers’ niche models.

Its recently introduced GLE Coupe large SUV is a direct competitor to the previously unchallenged BMW X6, while the more recent Mercedes GLC Coupe goes head to head with the mid-sized X4.

Until the AMG GT S came along the brand had its hands tied in the high-performance sports market where Porsche flourishes.

A move into a more off-road biased wagon model would not be a dramatic departure from the norm for Benz and the three-pointed star has been offering 4Matic four wheel drive sedan and wagon models in other markets for years.

At this stage BMW has not made its intentions clear if it intends to join the jacked-up wagon party with an all-paw Touring model, but it too has experimented in the segment with xDrive models in other global regions and iX models back as far as the 1990s.

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