There were skeptics who viewed Mercedes “affordable luxury” strategy as a potential brand killer. But the sub-$30,000 CLA line we’ve been hearing about for months has proved to be a hot seller,and it’s a big reason why Mercedes is likely to grab the title for top-selling luxury auto brand this year.
Most years around this time, automakers roll out big incentives and slash prices to sell cars. They do so primarily to sell off vehicles that have been on dealership lots too long (and that need to be moved to make space for more new-year models), and to boost sales during what tends to be a slow time of year.
In some cases, auto brands resort to December discounts for another reason: They’re trying to best a rival and get bragging rights as the year’s top seller in a specific vehicle category. Chevy and Ford, for example, might battle it out, with the Camaro and Mustang, respectively, for the title of best-selling American muscle car of the year. Various car models have been trying to unseat the Toyota Corolla as the best-selling new car worldwide. And every year, it seems, BMW and Mercedes duke it out for the crown of best-selling luxury auto brand.
This year, however, Mercedes swears it will not resort to discounts in order to win the title. Steve Cannon, CEO of Mercedes-Benz USA, recently told Automotive News that even though BMW was the top-selling brand in the luxury category last year, there would be no “last-minute sale” in December to try to beat BMW in total 2013 sales. “We’re not going to play that game. No shenanigans,” Cannon said. “We’re a shenanigan-free environment.”
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It would seem to be easy for Cannon to take such a stance—at least this year—because Mercedes thinks it already has the 2013 title wrapped up. Through September, BMW and Mercedes were neck and neck in terms of overall sales; “official” counts vary, but both had about 210,000 registrations in the U.S. by the end of September 2013. But after the Mercedes CLA line went on sale this fall with sticker prices starting under $30,000 (typical final price paid: about $35,000), Mercedes pushed strongly into the lead. After selling 4,895 CLAs during its first full month of availability (October), Mercedes-Benz could boast of a 25% overall rise in sales for the month, as well as 245,125 total sales for the year, compared to 240,139 for BMW, according to Businessweek.
In November, Mercedes reported continued strong sales, including a 13.4% increase compared to the same month in 2012 for strictly the Mercedes-Benz brand, allowing it to hit a record high 279,501 units sold through 11 months.
Now, reports Bloomberg News, due to the CLA’s runaway success, Mercedes is warning dealerships that it may have trouble keeping up with consumer demand for the “affordable luxury” model through the early months of 2014. If the current pace keeps up, Mercedes should win the luxury sales title for 2013, perhaps even without much substantial discounting. Considering that the CLA is less than half the price of other Mercedes models, the small coupe may already seem to many buyers like it’s a deal already.
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What’s more, Mercedes swears that the popular CLA isn’t cannibalizing sales of its higher-priced models. Instead, the automaker says that the CLA is attracting more customers into dealerships—younger ones especially—and that the presence of the CLA has helped boost sales for pricey and affordable Mercedes models alike. “Our dealers say that they’re seeing a lot more floor traffic and many new faces” Cannon said via an e-mail, per Bloomberg. “The increase in our overall model sales indicates that this traffic is benefiting all Mercedes-Benz models.”