Mercedes-Benz Enjoying Record Sales in U.S.

NEW YORK – Mercedes-Benz USA is on pace to sell more than 270,000 vehicles in the U.S. this year after setting another sales record in November, President Steve Cannon says.

“The wind has been at our backs this year,” he says. “The outlook is very positive.”

Cannon makes his remarks at a media event here, telling WardsAuto he believes the German premium brand one day could achieve annual sales of more than 500,000 units as the U.S. population continues to expand.

The boost in last month’s sales was fueled by early Christmas promotions, he says, while noting net pricing has improved in the industry, especially for Mercedes, which is seeing higher transaction prices than last year.

Bernhard Glaser, MBUSA vice president-marketing, says the average transaction price for a Mercedes is $56,000. Prices start at $35,000 for the C-Class and range up to more than $200,000 for the SLS.

Mercedes sales are weighted more heavily toward pricier E-Class and S-Class models, compared with BMW, which delivers more 3-Series models than 5- and 7-Series cars, he says.

“We're going to have a great December,” Cannon predicts, noting Mercedes set sales records in eight of the previous 11 months. “We could have sold 10,000 more GL and ML models (combined), but the Alabama factory couldn't produce enough of those crossover vehicles.”

One reason for that was demand from foreign markets for those models. “We make more on an ML sold in Germany than here,” he reveals. However, MBUSA received more C-Class and E-Class units because of Europe's slumping demand.

“We'll do better next year,” Cannon says, forecasting U.S. light-vehicle sales to climb as high as 15.3 million units in 2013. He also expects the luxury segment to grow. “I see next year punching over 2 million units,” compared with the 1.8 million deliveries he anticipates in 2012.

Cannon is looking to an improved housing market next year to “put more tailwind behind the luxury market.” Mercedes growth will be spurred in the next few years by new additions at the high and low ends of the product portfolio, he says.

The auto maker plans to introduce a model below the entry-level C-Class in 2013, followed by a cross/utility vehicle that will slot below the GLK in 2014. This will open the brand to new and younger buyers, Cannon predicts. Currently, the average C-Class buyer is 50 years old.

The new small vehicles will be “a terrific conquest opportunity,” he says.

Mercedes’ high loyalty following gives Canon confidence the brand will increase its potential customer base. “Once we get them in the door, we hold on to them better than anyone else.”

The auto maker also is planning new variants for the S-Class platform. “There will be more safety and new engineering,” Canon says, citing a new extra-long wheelbase model that will be added to the Mercedes portfolio. “It will offer a Maybach-like rear-passenger experience.”

Depending on what Washington does, he believes the U.S. auto industry could be in a 5- to 6-year expansion mode. Mercedes will be knocking on the door of more than 300,000 units in 2013, he predicts, helped by an industrywide increase in luxury-car sales to 2 million units by 2015.

Cannon expects Mercedes sales growth to be achieved with a slight adjustment to its current 356 retailers in the U.S. “In the next five years, we'll add just a handful of dealers.”

Just completing his first year in the job as Mercedes chief, Cannon reveals he has spent 150 days traveling this year. He wasn't able to visit every dealer, but touched base with many franchisees, he says.

Cannon also visited many of the Mercedes facilities around the country, including parts warehouses and the Vance, AL, assembly plant. In between, he says he made 10 trips to Mercedes-Benz headquarters in Stuttgart, Germany.