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Mercedes sees sales uplift ahead

Vitamin C: The updated C-Class is now in showrooms to help boost sales, although Mercedes admits that growth is not a certainty in the current market.

Strong final quarter should boost Mercedes sales, despite pressures on luxury class

Mercedes-Benz logo1 Oct 2018

MERCEDES-BENZ expects to improve its sales performance during the final quarter and recover lost ground across key passenger car lines, posting a similar annual result to last year – around 37,000 units, not including commercial vehicles – after slipping 7.5 per cent to the end of August.

 

Operating in a luxury car market that is currently down 13 per cent for the year to date, the leading prestige vehicle brand has found the going tough with a severe 23 per cent sales decline across its full passenger model range, while at the same time enjoying a healthy 24 per cent increase in new SUV registrations.

 

In an interview with GoAuto at the launch of the updated C-Class last week, Mercedes-Benz Australia/Pacific managing director and CEO Horst von Sanden identified market forces as the main areas of concern rather than individual model lines.

 

“I think we can rightfully say that we are pretty successful in all our segments – whether it’s E-Class, C-Class, GLC, we’re okay – but if the market is weakening, and going backwards, which it is at the moment, then we can only do so much to get our fair share,” he said.

 

“And whether the market will continue to weaken or whether it comes back, that needs to be seen. The consumer confidence is a key thing. I don’t think there is a genuine problem at the moment in the market, other than lack of confidence.”

 

The updated C-Class mid-size range and new-generation A-Class small car should help lift sales across Mercedes’ passenger car lines, while ongoing growth among its SUVs are anticipated, particularly with GLC which has overtaken C-Class this year to become the top-selling model in the stable.

 

“We are obviously confident to have a strong last quarter but I couldn’t tell you whether we will hit the same level as last year or will be slightly behind,” Mr von Sanden said.

 

“We think we’ll be in the ballpark – plus or minus a bit, but not dramatically.”

 

Mr von Sanden identified the slowing Australian property market and political instability – both locally and globally – as having a negative impact on Mercedes’ business in Australia.

 

“The property market, no doubt has (a big influence), and instability globally, but also locally, does have an impact as well,” he said.

 

“I think people are prepared to buy luxury and prestige (products) when they feel good about everything, then they buy faster and more.”

 

The volume-selling C-Class sedan and wagon are down 34 per cent this year, while A-Class has fallen 11.3 per cent and E-Class 27 per cent.

 

Mr von Sanden said model lifecycle was reflected in the results, with ageing models naturally losing ground, and that buyers’ gravitation towards SUVs was “a general trend we can’t do anything about” – other than ensure it is participating.

 

With this in mind, the Mercedes chief said maintaining class leadership with key passenger cars was a primary focus, as opposed to outright sales growth which might not be possible given the SUV boom.

 

This is particularly evident in the $60,000-plus mid-size segment that C-Class has dominated for many years, and in which it still holds a 30 per cent share. Last year, this share was 38 per cent.

 

“If you have segment leadership anyway, and that’s our ambition, then we have to take what the market gives us. Whether that is growth or not, it’s beyond our control,” Mr von Sanden said.

 

“I always like to achieve our targets and those targets are written down in numbers, in total. There are times when you don’t achieve them, and Stuttgart certainly doesn’t like that, but as long as we are getting our fair share of an available market, then we still have been successful.

 

“And that’s why I can’t give you a number, that’s why I can’t tell you, ‘Yes, we will be growing to that number’ because at this point in time we have a high level of uncertainty, we don’t know what the market is going to do.”

 

Next year, Mercedes will launch the all-new A-Class sedan, new-generation GLE large SUV and AMG GT four-door coupe, as well as a host of individual model variants across several model lines.

 

The all-electric EQC crossover is also due late in the year.  


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