Mercedes Sales Chief Expects Global Growth in 2013

NEW YORK – Western Europe is the only market where Mercedes sales are lagging, says Joachim Schmidt, Mercedes-Benz executive vice president-sales and marketing.

Mercedes continues to do well in China, a growing market, Schmidt tells WardsAuto in an interview at the New York International Auto Show. The U.S., Russia, Brazil and India also are bright spots in the global vehicle market.

Schmidt says Western Europe should record about 13 million vehicle sales this year.

Germany, Mercedes’ home market, will ring up about 3 million deliveries in 2013, about flat with last year. Schmidt predicts there will be no growth in Southern Europe, but he believes that market may have bottomed out.

He forecasts overall global vehicle sales will increase 4%-5% annually through 2020. “The premium segment will grow 1% more.”

Schmidt notes Mercedes customers pay a premium over comparably equipped competitive luxury cars, with the S-Class commanding up to an additional $10,000. The auto maker asks an overall 3%-5% premium over similarly outfitted BMWs and 5%-7% of equivalently equipped Audi models.

“The premium is more than 10% higher against Japanese luxury cars,” the Mercedes sales chief says, attributing the added cost to the auto maker’s ability to deliver more safety, comfort and durability in its vehicles.

Schmidt says Mercedes is utilizing 100% of its engine-production capacity, but that is proving to be a bottleneck in manufacturing more vehicles. Parent Daimler is growing engine capacity, bringing a new engine on line in Germany next year, while Mercedes also will begin sourcing 4-cyl. engines from Nissan.

The production squeeze particularly affects worldwide deliveries of SUVs. Mercedes builds only M-Class and GL vehicles at its U.S. Alabama plant, which has a nominal capacity of 175,000 units, according to WardsAuto data. The facility also will produce all C-Class cars sold in America beginning next year, with a Nissan plant in Tennessee supplying the engines.

Schmidt says future growth opportunities are brightest at the lower-priced end of the portfolio. A-, B-, E- and S-Class models, as well as the GLK cross/utility vehicle, are at full production. Daimler has assigned A-Class output to Finnish contract assembler Valmet in an attempt to meet demand. However, that model won't be available in the U.S. until the next generation debuts.

The U.S. market will get the B-Class as an all-electric vehicle by the end of this year. Schmidt notes the battery pack doesn't reduce cargo space, and the EV will ease range anxiety with a smartphone app informing drivers remotely how much range is available.

Mercedes does not plan to match BMW’s futuristic EV designs, although it might consider producing a natural-gas-powered B-Class model. “We'd be open to delivering that in the U.S.,” he says.

The auto maker also will offer a diesel engine in the GLK and will market fuel-cell vehicles, but the lack of supporting infrastructure will delay their rollout until 2017 at the earliest.