Mercedes Moves Into Thailand’s Compact-Car Segment

Mercedes-Benz, the longtime Asia/Pacific region’s luxury-car leader, is redefining its business model and chasing volume growth by targeting new segments and customers.

The first move is the arrival of the new A-Class in Thailand. The small car will enable the German auto maker to take the brand into the luxury-compact market, where it hopes to ride the recent wave of strong vehicles sales.

“With the new A-Class, (Mercedes) is opening up a whole new chapter in the compact segment,” says Martin Schulz, Mercedes-Benz Thailand vice president-sales and marketing.

Reaching new customers and lowering the age of its demographic will be necessary to keep Mercedes one step ahead of its rivals here, he says, noting the auto maker has BMW snapping at its heels.

Schulz, in the job since February, appreciates that the task requires a new approach.

“Mercedes has a long tradition in Thailand,” he says during the recent launch of the A-Class at the city’s new Okura Prestige Hotel. The A-Class will start to change the brand’s image, Schultz believes. “It’s exactly what we address with the new model.”

Mercedes’ target is firmly on younger customers, those who want to make a statement on style and fashion, he says. “People who haven't considered us before, young people, graduates, family successes.”

Schulz sees the distinctively styled A-Class as the tool to reach a new base. “Cars nowadays, to our target group, are an extension, a lifestyle, an expression.”

The high-earning middle-class base is growing rapidly, and car buyers are looking for vehicles that resonate. To reach these prospective buyers, “most important is to offer good products, he says.

But Schulz recognizes consumers are attracted to the A-Class for a several reasons. Mercedes will have to spread its marketing net wide to attract not onlyt conquest buyers but also first-time buyers of premium brands who want to move up from mass-production models.

“We have to become much more engaging,” he says. “We have to find ways to connect.”

Toward this end, the auto maker intends to eschew its traditional marketing methods in favor of new media. “Digital will be the ecosystem of the A-Class,” Schulz says.

This will involve connecting with customers through a dedicated new website, as well as Facebook, Twitter and Instagram (online photo service).

“We will involve customers more, to drive their cars and share the experience,” Schulz says. “(We want to) create a platform where the voices of the new generation can be heard.”

The A-Class arrives in Thailand as a completely built-up model with two trim levels: the A180 1.6L with a Style package that will be priced at 1.9 million baht ($61,900) and the A250 2.0L in AMG Sport guise priced at TB2.5 million ($81,473). There are no plans for complete-knocked-down kit assembly.

Mercedes will emphasize the sporty and performance credentials of the brand, Schulz  says, adding he’s confident its capability will impress potential customers. Marketing “will focus on dynamic product events including driving at racetracks and in slalom and agility demonstrations.

The A-Class is the first of several new segments Mercedes Thailand plans to enter in 2013, supplementing its traditional dependence on the C- and E-Class.

Indeed, the A-Class potentially could challenge the traditional volume-leading C-Class. Schulz isn’t keen to speculate, but says, “Everything is possible.”

Mercedes is not announcing sales targets. “We have to see what demand is” after the A-Class debuts at the Thailand International Motor Expo, which runs through Dec. 10.