By on December 14, 2010

We have said the race for who will be the #1 luxury brand in the U.S.A. is too close to call and that it will come down to the wire. Now, those weenies of Mercedes throw in the towel and concede defeat. “I’m pretty sure we’ll be No. 3,” Ernst Lieb, president of Mercedes-Benz’s U.S., told Bloomberg. Whatever happened to “we will never surrender?” (Sorry, that was a Brit.) But look at those numbers, and join us in shouting “boohoo” at Lieb. And Mercedes. No fight left in them no more?

At the end of November, Toyota’s Lexus had sold 4,936 units more than BMW. But BMW was only 545 Bavarian cars ahead of Stuttgart’s Mercedes. Sure, the top spot for Lexus is as good as guaranteed. But Mercedes can’t pull itself together and close a gap of a few hundred cars? What’s up with them?

Instead of fighting to the last bullet, Lieb took to painting. A pretty picture.

“If you go back four years ago, Lexus was 75,000 units ahead of us and BMW was over 40,000 units ahead of us,” Lieb said. “At the end of the year with Lexus being, I don’t know, 6,000 units ahead of us, and BMW, 1,500, I think that’s a pretty good achievement.”

Jeez, he thinks BMW will even extend the lead? Defeatist yellow belly!

Luxury cars, pretty much unsalable last year, are making a strong comeback. “We are seeing more than usual increases in luxury sales,” says Jesse Toprak of TrueCar.com

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16 Comments on “The Luxorace: Mercedes Throws In Towel...”


  • avatar
    Autojunkie

    When did Mercedes become a French company?

  • avatar
    ash78

    It’s just a badge. You can compare yourself to Lexus all you want, but it’s almost apples-and-oranges because of Toyota and their volume platform sharing capabilities. Meanwhile, neither Kraut brand can amortize those costs beyond their single brand (which also helps Lexus offer lower prices).
     
    Mercedes makes a helluva car, I just wish they’d get over themselves in the US market and start selling more basic models (no, I don’t mean another $25k C coupe!). Minimize some of the unnecessary electrical crap and options that plagued them throughout the 90s and early 2000s. Sell us a car with the same limited froufrou options as a $20k midsize vehicle, with a modest-but-non-negotioable margin, and regain a reputation for solid and reliable vehicles. Maybe even sell these cars under a marketing scheme aimed at value buyers or…GASP….car enthusiasts? I’d sign on the dotted line for a $40k E350 with just the basics: power windows, manual seats, pleather interior, decent stereo, and little else.
     
    It’s too bad our 3-to-5-year replacement mentality makes things like this impossible.

    • 0 avatar

      I thought beancounters gave the raise to decontenting, but apparently… it was “car enthusiasts” all along. Also, a reliable Benz… isn’t it something that died with the 70s, years and years before my children were born?

    • 0 avatar
      ash78

      Yep…and it’s high time for a resurrection of a longstanding reputation before it dies completely. They’re on their way to regaining this, but probably not well enough.
       
      What if Volvos suddenly became unsafe, or Toyotas suddenly became unreliable (gulp)? People would freak out.
       
      (fwiw, I always saw the beancounters as the ones urging corner cutting, rather than “obvious decontenting.” In other words, sourcing an electric seat motor from a Chinese whorehouse instead of just offering manual seats.)

    • 0 avatar
      mhadi

      The basic E class with “pleather” (also known as MBTex or Artico leather) without Nav, keyless drive, etc costs $62,500 in Canada. The difference of power seats is not going to bring the cost down that much – the development costs have to be factored in for the basic car.
      The price of $40,000 buys you an also basic C300 – so you want an E-class for C-class money? Smart.
      That’s the problem with the American market – you expect to pay the cheapest prices in the world for cars, but want to get to pick and choose options, but never pay more. The only reason why the American market is so important (and shrinking in favour of China) is because there are so many of you (>250million) making a large market.

    • 0 avatar
      tallnikita

      >>(no, I don’t mean another $25k C coupe!)
      Why not?  I leased it for 3.5 years, drove about 50K miles, what a sweet car that was.  33 mpg on highway, acceleration, sweet ride.  Totally kicks 3-series’ ass.  The best memory was averaging 77 mph from Detroit to NJ, which means the entire Ohio Turnpike at 100+ mph.

      It’s rear hatch electric handle wasn’t working by the end, but otherwise not a single issue with the car.

    • 0 avatar
      ash78

      mhadi,
       
      Spoken just like so many people who are bitter about exchange rates, taxes, fuel prices, etc. I don’t know if that’s your situation, but it came across like a broken record. I miss the days of 1=1 Euro parity (or heck, the mid-80-cent range several years ago!). It sure would make my hypothetical situation a lot more realistic for European exporters, too.
       
      Why wouldn’t you want the most car for the money? Why wouldn’t you want a company to sell an E-Class at $40k USD in order to be more competitive and expand their market share? They could absolutely do it if they tried a little harder, and maybe if they stopped expanding their product line into unnecessary segments (choose a GLK over C-class wagon? Why?). The US market does have some of the cheapest cars in the world, but most models remain profitable despite the low price. In turn, the US is offered among the least options of any country in the world–also regrettable–but it’s part of keeping the price down.

    • 0 avatar
      ash78

      @tallnikita
       
      The car was just fine on its own…I was emphasizing that Mercedes ought to offer more budget options (but not solely) in the limited 3-door coupe segment. Apart from that, the company itself considers the C Coupe a relative failure. That makes me a sad panda.

  • avatar
    plunk10

    Toyotas are already less reliable than before, but Mercedes has a LONGGGG way to go if they want to catch up to the Asian makers on reliability.
     
    I’d like to see them create a competitor to the BMW 335d, or even the VW Golf TDI.  A high volume compact diesel would help this brand tremendously, especially if a no-frills option were offered.

    • 0 avatar
      mhadi

      there are plenty of Mercedes diesel options in Europe. Mercedes has long been a diesel car manufacturer – how do you think all those taxis run on? The C-class is no exception.
       
      I think the basic issue is the fact that cars in the U.S. are too cheap to be cost effective for manufacturers to start offering lots of options that will not add to their bottom-line. Our C300 is around $42,000 before any options or taxes. Yours is around $36,500 – that’s a difference of $5500, before discounting. The Canadian dollar = American dollar. Makes more sense to sell cars here , or anywhere else for that matter than in the U.S.
      Why would Mercedes bother to offer a diesel if people in the U.S. will only pay cut rate prices? Would you be willing to pay $42,000 for a C class diesel?

  • avatar
    PeriSoft

    Put a thousand cars on the lots for 10k a piece. BMW problem solved.

  • avatar
    Steven02

    MB is making the right move here.  You don’t chase volume like this.  If you do, you end up like GM.  Grow the business the right way and you will be fine.  Being #1 (by volume) isn’t important.  Being profitable is.

  • avatar
    blue adidas

    I don’t know why this is a title that any real luxury car brand would want to win. Aside from the LS and the too-niche-to-be-relelvant LFA, Lexus can barely be considered a luxury car company. As soon as a luxury brand becomes accessible to everyone, it loses it’s appeal. What luxury brands should do is to make the best cars they possibly can, and sell them at as much profit as they can. As soon as you have to rebadge a Toyota Avensis or Camry, you’ve lost your way completely. Just look at Cadillac in the 80s.

  • avatar
    Dimwit

    Don’t sell Lieb short. He was on TV a lot up here when he just ran the Canadian operations and he’s a very sharp cookie. Knows that there’s far more at stake that some fleeting satisfaction at “winning” the sales numbers.


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