Mercedes Bucks U.S. Recession Woes With $183,000 SLS AMG

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New York Int’l Auto Show

NEW YORK – Undaunted by a slowly recovering U.S. economy, Mercedes-Benz U.S.A. Inc. boldly debuts an all-new, street-legal gullwing racer, the SLS AMG, at the auto show here.

It’s unlikely a car buyer collecting unemployment benefits in this recession will plop down $183,000 for the model. But Mercedes obviously believes there’s a clientele for top-line vehicles such as its futuristic sports car.

The luxury auto maker also is enhancing the offerings of its burgeoning E-Class lineup, displaying a new E350 Bluetec diesel sedan, E-Class Cabriolet that goes on sale next month and 4Matic station wagon at the show.

Rebounding from the sales calamity of last year, Mercedes sold slightly more than 20,000 cars in March to end the first quarter with a 25.7% gain on year-ago.

But the German auto maker is forging ahead with a new marketing offensive aimed at capturing more market share in the shrinking premium-luxury-vehicle segment.

“We're being rewarded for our investment in this market,” MBUSA President and CEO Ernst Lieb says.

Mercedes dealer franchisees have poured $1.4 billion into their facilities over the past 18 months, designed to draw more customers in the future.

“We have achieved a strong position by staying true to the course we took two years ago,” Lieb says. “I'm happy with what our dealers have done.”

The Mercedes USA chief says his company will not engage in a price war to buy market share. Although some competitive dealers are trying to undercut Mercedes’ pricing of its flagship model, Lieb says he is short of S-Class models.

Even though the sedan is priced 10%-12% higher than rival models, it still leads its segment in volume. However, the flagship's overall sales are down compared with last year.

Lieb is encouraged the entry-level C-Class has closed the gap on the BMW 3-Series sedan, the perennial volume leader in the premium segment. BMW has more derivatives of the 3-Series than Mercedes does of the C-Class.

“We will introduce more derivatives of the C-Class,” Lieb promises. “This is our competitor's bread and butter, but ours is a little higher up (in price),” he says. Regardless, he promises Mercedes plans more competition in this product segment.

“Diversifying the C-Class makes all the sense in the world,” he says.

Mercedes also plans to go further downmarket in order to compete with the BMW 1-Series. The next generation B-Class is planned for sale in the U.S.

“It's a significant departure from the current B-Class,” Lieb says. The new B-Class is slightly smaller than the C-Class, about 2.5 ins. (6.4 cm) shorter in overall length. “We see these vehicles as being 100% appropriate for the U.S.”

Lieb declines to reveal more information on the B-Class. “We haven't even reached the design freeze on the new generation,” he says. Prices for the C-Class range from $34,000-$40,000. “We'll position the B-Class below the C-Class,” Lieb says. “We think it will be the new volume-leader for Mercedes-Benz.”

Mercedes also will introduce a new direct injection 4-cyl. engine for the next-generation C-Class and GLK models.