Thursday 24 May 2018

Mercedes step up price war as it raps rival dealers over 'risky sales' strategy

Mercedes Cabrio
Mercedes Cabrio
Mercedes S Class
Eddie Cunningham

Eddie Cunningham

Fresh from blaming some rival dealers and distributors for creating a false sense of higher new-car sales, Mercedes this week outlined their own plans to get buyers into cars for next year.

In simple terms they have: l declared a posh-car price war;

l and attacked some rivals over registering cars 'no one wants' to keep market share.

As I've previously reported elsewhere (www.independent.ie), the marque's passenger-car sales chief Ciaran Allen claimed rival dealers are pre-registering cars to such a level that the 'bubble' will burst. He warned that no business could survive on the basis of registering thousands of cars that "no one wants" at the end of each month.

He described the practice - called 'pre-regging' - as "reckless trading and the single biggest threat to the motor industry".

He added: "They can't beat the logic of supply and demand."

We haven't heard the end of that issue, that's for sure.

The other big push had to do with Mercedes' own sales strategy: cars that they at least expect people will want.

They say they're planning an "awesome2 year in 2018. We'll have to wait and see on that. Globally they are planning to introduce 18 new models over the next eight years - after a fair flurry of activity over the past few.

It's all about taking the premium number one slot. Rivals will not be easily removed, though, and are already battling hard with new initiatives and products of their own.

But for now the main Mercedes thrust here lies in up-speccing cars for a lot less than the combined cost of the additional equipment. There is a heavy emphasis on AMG-like 'performance' kit across the board.

They say they are increasing equipment on all C-Class models, for example, claiming the additional price (€700) is a fraction (€5,000) of the true value. Similarly, the E-Class, where they reckon €4,200 of equipment is costing a buyer just €2,200 with increased spec.

A significant comment on that from Mr Allen: "That's how we get younger drivers into our cars. We've never been in such a competitive position."

Cars such as the CLA and GLC ('selling like hotcakes') enjoy significant price advantage, they claim. Again, rivals such as BMW and Audi would, and will, dispute that. It is a battlefield out there and shaping up to be an even bigger one next year.

Indo Motoring

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