Mercedes to Add to Successful Compact-Model Lineup

DETROIT – Mercedes-Benz unveils a refreshed GLA model on the eve of the North American International Auto Show here, promising an even bigger push into the compact-vehicle sector over the next several years.

Daimler CEO Dieter Zetsche gives much of the credit to Mercedes’ compact cars in the brand’s rise last year to become the No.1 premium-brand worldwide, with total light-vehicle sales topping 2 million units.

“Outperforming the competition in the premium market was actually a target at Mercedes for 2020,” Zetsche says of the brand’s No.1 status. “So we did not only finish first (in 2016), we also got there fast. Our new target now is staying on top.”

The plan to expand the compact lineup will see Mercedes’ stable grow from the current five models to eight with next-generation offerings, likely due before the end of the decade.

“Our small cars have had a big effect on our sales performance,” Zetsche says at the Sunday night media backgrounder. “Over the last five years, we’ve sold more than 2 million A- and B-Class units, GLA, CLA and CLA Shooting Brake.”

He also notes the models have succeeded in luring younger buyers into the Mercedes fold, a trend the brand will emphasize with a new ad campaign that kicks off in March around the theme “Grow Up – Spend Money Wisely.”

“More than every second customer of a compact Mercedes model here in the U.S. is new to our brand,” the CEO says, adding, “The average age of an A-Class customer in Europe has dropped by 13.5 years from the previous to the current model.

“For us at Mercedes, our premium small cars…are critical as an entry to our brand.”

Zetsche points to styling, performance offshoots under the AMG sub-brand and availability of the latest technology such as Apple CarPlay and Active Brake Assist as reasons the compact models have resonated with buyers.

Demand for Mercedes’ current compact lineup has exceeded expectations and outpaced supply, the executive says, adding that expanding the lineup with three new models will require additional production capacity.

“Of course we’ll have to add further capacity,” he tells WardsAuto. “We are selling dramatically more of these vehicles than we ever had planned for in the current generation. And we do believe the next generation with more product, more family members, will open up even more opportunities.”

Newly installed sales and marketing boss, Britta Seeger, confirms each of Mercedes’s existing five compact models will receive successor models. Additions to the lineup will include a 4-door sedan, which is planned to be produced with both a standard wheelbase for markets such as the U.S. and a long-wheelbase to be offered exclusively in China.

Set to be previewed in concept form at the Shanghai auto show in April, the new A-Class sedan is planned to rival the likes of the Audi A3 sedan and 4-door version of the BMW 1-Series recently introduced to the Chinese market and planned for sale in Brazil.

Also under development is a new compact CUV to be positioned above the GLA, likely taking the name GLB. Targeted at the Audi Q3 and BMW X1, it is planned to be produced in both standard and long wheelbase guises – the former supporting a 5-seat interior layout and the latter set to form the basis of a 7-seat variant.

Among the factories planned to produce the Mercedes compact car models is a new site currently under construction in Aguascalientes, Mexico. Set to open in 2018, it initially will build the GLA but is also earmarked to produce the new A-Class sedan and long-wheelbase the GLB.

Global sales of Mercedes-Benz’s compact car models rose 9.3% in 2016 at 636,903.

The revamped GLA CUV, marking the first freshening for the model since its initial introduction in 2013, gets new bumpers, wheels, LED headlamps, brake lights with three levels of intensity, a 360-degree camera and an updated interior with new front seats and a standard 8-in. (20-cm) center display.

The GLA 220 4Matic will boast an all-new gasoline 4-cyl. delivering 184 hp and 221 lb.-ft. (300 Nm) of torque.

Meanwhile, in discussing wide-ranging issues with reporters, Zetsche:

Stays clear of the topic of the potential impact of President-elect Donald Trump on the industry. “I don’t have concerns at this point of time, because I don’t have any facts. All there’s been so far is rhetoric and speculation. We’ll wait until the next president takes office and then the objective is to collaborate the best way possible.”

Remains cautiously optimistic about the U.S. market for 2017. “We have seen very strong growth years in the past. The most recent year has topped a record again, so I don’t think we’ll see much growth again, though we’re already at high volumes. Our intention is to stay on top in this market. We will not do anything (crazy) in the year ahead (in terms of incentives). We will rely on the strength of the product.”

Says he is unconcerned about the prospect of increased import tariffs in the U.S. under the new Trump Admin. “We are in the U.S. with a strong manufacturing base. We are exporting from the U.S. The GLE is produced exclusively in Alabama and exported all over the world. So we have a balanced situation there. I’m not worried.”

[email protected] @DavidZoia