Mercedes-Benz is on a winning streak. The brand finished July within a couple hundred units of passing Audi for second place in global premium-car sales after No. 1 BMW, helped by surging sales in China. In addition, its first-half margins exceeded those of BMW and Audi. Sales chief Ola Kaellenius spoke to Automotive News Europe Correspondent Christiaan Hetzner about how Mercedes plans to protect its premium image -- and its profits -- despite a growing reliance on smaller, lower-margin compacts.
Do your more affluent customers feel Mercedes is diluting the brand’s image with its growing emphasis on volume compact models?
I often got this question when I was at AMG and we wanted to introduce the A 45 [a performance version of the compact A class]. People would ask how the S 63 or E 63 customer might feel about that. I spoke with many of our customers personally, and the reaction was actually always positive. The S 63 driver feels that the A 45 is a really cool offering for that segment and he may consider buying one for his son or daughter. So you see, I cannot give you any anecdotal evidence about an unhappy S-class customer because I haven’t been confronted by any.
How far can it go? Will you add a subcompact to rival the Audi A1?
We think the A class is a natural starting point for the Mercedes brand. We have no plans to go below it. That maybe takes it a tad too far from a brand point of view, and it’s also economically less interesting.
Will China’s economic slowdown cause you to change your plans there?
It remains our biggest growth market so we have not changed our midterm or long-term view. We opened up about 100 sales points last year, many Tier 2, 3 and 4 cities where we were not present before. This year we will add about 50 more showrooms. In some cases it is starting to make sense to expand current sites now that our car parc is big enough in some mature urban markets.