Mercedes Reigns Over Thai Luxury Segment

BANGKOK – Mercedes-Benz strengthened its domination of Thailand’s luxury market in 2018 and shows no signs of letting up as it pursues electrification and meets growing demand for its high-performance vehicles.

The automaker reported record sales of 15,785 units in Thailand in 2018, up 9% year-on-year, and remained the country’s leading luxury brand with a market share exceeding 50%. Compact-model and SUV sales grew to about one-quarter of the sales mix.

Besides importing completely built-up vehicles, Mercedes builds complete-knocked-down units including C-Class, E-Class and S-Class models through its local joint-venture partner, Thonburi.

The automaker launched 16 new or refreshed models in various trim levels and body styles last year and plans 20 such launches in 2019.

Executives see 2018 as a year when key building blocks for the future were put in place through the commencement of a €100 million ($113.4 million) investment through to 2020 that includes construction of t a new electric-vehicle battery plant.

Mercedes also has overhauled its supply chain, bringing upstream functions physically closer to the factory, says Frank Steinacher, Mercedes Thailand vice president-sales and marketing.

The automaker sees Thailand’s premium segment growing about 10% this year, putting it ahead of the overall market, which is forecast to gain in the low single digits.

“More competitors, more brands are moving into the premium luxury segment,” Steinacher says. “New technologies and new products are the driver in the luxury segment in Thailand.”

The AMG performance sub-brand is another success story of 2018. AMG models are being assembled from CKD kits. Mercedes says AMG sales were up 309% in 2018, the sub-brand’s second year on the Thai market.

“Look back two years” to when Mercedes Thailand launched AMG, Folger says. “The performance segment was very small – (mostly) gray, import cars. (The) feedback was that there is a need. We dedicated our setup to localized” production of AMG models.

“Localizing performance models is a clear commitment (to Thailand) and also an expectation we will sell them,” he says. “We’re the only OEM who is producing such performance cars” in the country. We believe the growth opportunities are there.”

As with the other segments, Mercedes expects AMG sales to increase in 2019. “We believe the growth opportunities are there,” Folger says.

Mercedes has 36 dealers spread across every province in Thailand and plans to add four this year. There are 13 co-branded Mercedes-AMG dealers, a number also set to grow.

Customer service and aftersales also grew in 2018. “Every second car was (purchased) through our finance solutions, showing finance is very important to our customers,” says Putthi Tulayathun, vice president-customer services, who adds Mercedes Thailand is considering offering lease customers one monthly payment to include payments and servicing.