Special Coverage

logoNew York Int’l Auto Show

NEW YORK – Mercedes-Benz USA soars to its best first quarter ever, posting a 9.2% sales increase over like-2006.

That performance comes despite the fact its volume-leading C-Class model is in a run-out phase, MBUSA President and CEO Ernst Lieb says here in an interview at the auto show.

“We’re outdoing most of our competitors,” he says, pointing out that what he defines as the premium segment was down 1.2% for the quarter.

“You never know what’s going to happen, but we hope for at least a stable year, if not an increase,” Lieb says.

However, he sees signs that a 14th consecutive year of growth is achievable.

Lieb especially is encouraged by the increase in diesel demand, even though the oil burners can’t be sold in eight states. Volume in the first quarter reached 2,470 units, up about 40% over the same period last year. Mercedes sold 6,941 diesel vehicles for entire 2006.

“We’re going to go quite a bit higher in diesels this year,” Lieb predicts. “Diesels could be a stronger element in our market.

“We hope we’ll have diesels in 50 states next year,” he adds.

Lieb is cautious about the rate of growth but says he is confident Mercedes could supply more diesels if demand develops in North America.

Availability of diesels has helped the M-Class take market share from gasoline-powered competitors such as the BMW X5 and the Lexus RX350, he says.

Average vehicle transaction prices, including those for the flagship S-Class, have declined so far this year and are likely to remain lower throughout 2007, the Mercedes executive admits. “But we’ll be ahead of our competitors,” he says.

Mercedes remains a very exclusive brand in the U.S., but MBUSA has a lot of freedom when it comes to positioning the marque.

“There are product evaluations every six months,” he says. “We’re waiting to see what our competitors do with vehicles like the BMW 1-Series.”

But right now, there’s no need for vehicles below C-Class in size and price, Lieb says, adding that if a market were to develop, MBUSA could have an entry within four to five years.

Mercedes plans to keep pace with sales incentives offered by competitors.

“If we wouldn’t react to them, our customers would think we’re arrogant,” Lieb says.

However, Mercedes does not intend to match BMW’s offer of free maintenance on new vehicles for four years. “It wouldn’t even make a blip in our sales,” he says.

Lieb declines to estimate how much Mercedes can grow its market share.

“I just can’t see that far ahead, but I see 14 consecutive years of growth (for our brand),” he says.