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Benz’s large range safe – for now

Close call: The incoming E-Class All Terrain is the only Estate on the books for the moment, and it needs to sell sufficient numbers to stay around.

Every sale is ‘important’ but all Merc model lines need to pull their weight

8 Feb 2017

WITH a line-up that tops almost 100 models, Mercedes-Benz Australia/Pacific asks only one thing – that each car pulls its weight sales wise.

While vehicles such as the C-Class mid-sizer and the GLC SUV are bona fide success stories, other, more expensive models still need to contribute to the bottom line.

The company recorded 13.3 per cent growth in 2016 over its 2015 result, but Mercedes-Benz Australia/Pacific senior manager public relations, product and corporate communications David McCarthy says there is no room for slackers in the group.

“You’ve got to give people choice,” he told GoAuto at the recent Bathurst 12 Hour endurance race. “If you don't give them choice, they'll go elsewhere. And you've got to balance that with the contribution it makes to the bottom line.

Every sale is important.”

Mr McCarthy said that the company is refreshing its outlook and its offerings constantly, and none of the current roster is under immediate threat.

“Under what we call the heavy metal, which is anything over $150,000, a car has to do 100 a year to justify doing it.

“Something like the G Professional (4x4 ute), that adds 200 to 300 vehicles.

Well, that’s all part of your total, so every vehicle is important.

“Nothing is under notice. E-Class Estate was a challenge, but we did the volume. But again, one of the arguments is how do we make this work, how do we make money, how do we cover the compliance costs, the parts cost, the training cost. But also a factor in that that’s really important is you’ve got existing customers for that car.”

While the majority of Benz’s broad range achieved sales of well over 100 units last year, the slowest sellers were the premium SL sportscar (57 units) and luxurious S-Class Coupe and Convertible (94 units).

Offering existing customers a chance to upgrade is a big factor in keeping a broad, shallow product range on the boil, according to Mr McCarthy.

“E-Class Estate buyers are very loyal,” he noted. “Same as S-Class Coupe customers. So if you don’t offer it, they’ll go somewhere else. And once someone leaves your brand it’s actually quite hard to get them back.”

Mr McCarthy also pointed to the fact that customers can potentially work their way upwards through different grades and price points in the current range.

“You have to undertake a lot of activity to get new people to the brand,” he said. “The compact cars (A-Class, B-Class) have done that. But you want to keep them in the brand, and again it’s that stepping. You’re stepping up price points but also size and body variants, and engine variants.”

Mr McCarthy acknowledged that one range that is a more difficult to sell currently is the wagon, with the E-Class 220D All-Terrain Estate a prime example of getting the balance of volume and customer expectation correct.

“I feel good about that,” he said. “Audi has done very well in that market, Volvo does pretty well. Estates of that size and price bracket are hard to sell. But again, I think once people see it and they drive it... We did about 100 E Class Estates last year. We’re going to look to hopefully double that.

“Everyone that’s driven it talks about its all-terrain ability. Okay, you’re not going to go across the Simpson Desert in it, let alone the Canning Stock Route, but for snow, for camping, for that sort of stuff, I think it’s going to do really well. And its ride and performance and dynamics are really exceptional. At around $110, 000, I think it's going to do very well.”

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