Benz-BMW Rivalry ‘Kindergarten’ Games

DETROIT – Others may have avidly watched the battle of the German luxury auto makers, but Daimler chief Dieter Zetsche says he wasn’t keeping score when his company’s Mercedes-Benz nearly beat BMW in 2011 sales.

“The volume game is not our game,” he tells a gathering of journalists at the North American International Auto Show here.

The contest seemed particularly pitched in the U.S., where BMW edged out Mercedes 247,907 units to 245,192, with both brands increasing sales 13%. Toyota’s Lexus luxury division, which had been the segment champ for more than a decade, dropped 13% to place third with 198,552 deliveries.

In the race to the finish, Mercedes withheld final 2011 U.S. sales results, suspecting BMW would tweak numbers. BMW denied that, accusing Mercedes of laying on the incentives.

It sometimes seemed like “kindergarten” games, Zetsche says. “I couldn’t care less if we came in first.”   

Both BMW and Mercedes set global sales records, much of it driven by demand in China.

BMW-brand worldwide deliveries increased to 1.38 million units, Daimler’s to 1.36 million, including Mercedes and non-luxury Smart vehicles.

“Our objective for 2012 is simple,” Zetsche says. “To do even better.”

He sees continued growth in China and North America, but not Europe, which is going through a time of financial crisis centered on the euro. “For Europe, flat altogether would be a good outcome,” he says.

The luxury-car market was hit hard during the U.S. recession, but has regained ground. The premium market started slowly in 2011 but picked up near the end of the year, Zetsche notes.

The overall auto industry is looking bright compared with the dark days of 2008 and 2009.

“Not that long ago, the president of General Motors practically had to ride a bicycle to Washington,” Zetsche says, referring to some U.S. senators rapping U.S. auto CEOs for traveling in corporate jets to ask for federal aid.

Daimler will continue to form partnerships with other car companies when it makes sense, although “the objective is not to have as many (joint) projects as possible,” he says.

Nissan and Daimler will produce 4-cyl. Mercedes-engineered gasoline engines at Nissan’s Tennessee engine plant. Production starts in 2014 on engines for Mercedes and Infiniti models.

The collaborative effort isn’t expected to blur the Mercedes brand because Infiniti, Nissan’s premium division, is something of a Mercedes peer. “We’re not talking about supplying engines to a New York cab company,” Zetsche says.

He says it doesn’t seem likely, but doesn’t wave off the prospects of Daimler partnering with Italian auto maker Fiat. “Sergio (Marchionne) and I go way back,” Zetsche says of the Fiat CEO.

Although Mercedes sales are up, Smart minicar deliveries in the U.S. have been dismal, with only 700 deliveries last month, “which doesn’t say much,” he says.

“The potential for small cars is limited in the U.S. but there is a realistic chance for some good volume.”

Daimler can do a better job of leveraging the Smart brand in the U.S., Zetsche says.

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