Mercedes-Benz Thrives as Russian LV Market Shrinks

MOSCOW – Mercedes-Benz is maneuvering around Russia’s economic and political roadblocks while rival luxury automakers BMW and Audi have backslid.

Despite sanctions imposed on the country in the wake of its occupation of Crimea and support for pro-Russian rebels in Ukraine, and devaluation of the ruble, Mercedes deliveries increased 13.1% year-on-year in September and 18.6% year-to-date, according to WardsAuto data.

BMW sales plunged 45.9% last month and were down 11.4% after nine months, while Audi saw a 17.0% September drop-off  and a 4.7% year-to-date decline.

Mercedes has opened up a wide lead in unit sales with 42,050 through September, compared with BMW’s 26,317 and Audi’s 25,724.

Russian media reports indicate Mercedes parent Daimler continues searching for a local production partner. That would allow the automaker to circumvent the Russian government’s recent ban on state purchases of imported cars, of which Mercedes was a leading supplier.

A Mercedes production JV also could be encouraged by the possibility that sanctions against Russia could be lifted by the end of October.

Which models would be built locally, and production volumes, have not been disclosed. But analysts note leading candidates are the GLK and GLA compact CUVs, sales of which have increased significantly in recent years. The automaker also might build E-Class sedans, which are popular among Russian officials and other corporate clients.

While BMW is outselling Audi by a razor-thin margin, the Volkswagen luxury brand still aims to become Russia’s biggest seller of premium cars. Achim Saurer, who takes over Nov. 1 as head of Audi Russia, has announced plans to launch new models, including CUVs and D-segment sedans, for the local market.

Other premium brands also have prospered despite the economic and political uncertainties facing Russia. Lexus sales jumped 34.1% in September and were up 18.9% year-to-date, WardsAuto data shows. Jaguar Land Rover deliveries slipped 0.9% last month but were ahead 4.0% on the year.

Overall light-vehicle sales in the country dropped 20.1% in September and were down 13.0% after nine months. The government is trying to stimulate the market by allowing auto loans to be repaid out of “maternity capital” subsidies for women who bear or adopt a second, third or subsequent child, and is considering whether to resume subsidies for banks making auto loans to keep interest rates down.