Can the United States prove to be Mercedes-Benz's most lucrative market?
The automaker's U.S. chief, Steve Cannon, says that growth within the country is now crucial as sales to European and Chinese consumers continue to stagnate. The company hopes to overtake and dominate the worldwide sales currently enjoyed by rivals BMW AG and Volkswagen AG's Audi by 2020, and as a result, must now focus its efforts on growing markets -- potentially lowering investment rates in Europe and China in order to pump more resources in to the United States.
As part of the process, Mercedes-Benz plans to introduce 30 new models within the U.S. in the next seven years, as well as expand operations in the country and neighboring Mexico. It will then be up to Cannon to turn this investment into profit margins fit to please parent company Daimler AG.
While BMW has been the king of U.S. luxury car sales for the past two years, Mercedes-Benz hopes that it will become the top luxury automaker by 2020 -- and in order to achieve this, Cannon says that luring the next generation of drivers is critical to cracking the United States.
Mercedes-Benz has trouble appealing to under 44-year-olds. However, the Mercedes CLA compact -- with a price tag of just under $30,000 -- is touted as a way to enter this lucrative segment of the market. With its price range and sporty look, the CLA could entice younger drivers to buy, but as IHS analyst Thomas Libby says, this could also remove sales from the more expensive C-Class range.
While Cannon has not revealed the firm's sales targets, the chief said that tackling 11 segments where Mercedes-Benz does not currently compete -- including different price ranges and styles of vehicle -- is likely to raise the firm's game.
"We're going to be a 300,000 [sales] brand this year,” Cannon commented. "Add 11 new segments. There's absolute growth potential."
Via: Wall Street Journal
Image credit: Mercedes-Benz