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Daimler's Mercedes-Benz Pledges Sales Growth without Discounts

March 01, 2010

STUTTGART, GERMANY - Daimler AG, the world's second- largest maker of luxury cars, intends to grab market share from competitors this year by focusing on new Mercedes-Benz models and cleaner technology rather than discounts, according to Bloomberg.

Mercedes-Benz Cars is targeting a "high single-digit" percentage increase in deliveries in the first quarter and will outpace global auto market growth of 3 percent to 4 percent in 2010, Joachim Schmidt, the division's executive vice president of sales and marketing, said in a phone interview. The brand aims to maintain its price premium and scale back special offers to consumers, he said.

"We won't buy market share by reducing the value of our product with incentives," Schmidt said yesterday.

Mercedes is working to close the sales gap with luxury leader Bayerische Motoren Werke AG while fending off Volkswagen AG's Audi brand, which seeks to become the world's top high-end car manufacturer by 2015. Daimler will present a prototype diesel-electric hybrid of the Mercedes-Benz E-Class sedan at the Geneva International Motor Show, which opens on March 4, as part of an effort to catch up with BMW in green technology.

U.S. buyers of Mercedes-Benz cars and sport-utility vehicles in January received an average $3,077 in rebates and discount financing, about 35 percent less than a year earlier, according to data from the automotive-retailing Web site. That was nearly double the average $1,655 incentive offered by Audi, while lower than the $4,924 given by BMW.

In Germany, Mercedes-Benz's rebates averaged 10.2 percent off the list price in January, matching the figure at Audi, according to data from the Autohaus PulsSchlag trade publication, which doesn't have numbers for BMW.

Sales at Mercedes-Benz Cars, including Smart and Maybach models, fell 14 percent in 2009 to 1.09 million cars and SUVs. BMW group sales, which also include Mini and Rolls-Royce cars, declined 10 percent to 1.29 million deliveries. Stuttgart, Germany-based Daimler's auto brands held a 4.8 percent market share in Europe last year compared with 4.9 percent for BMW, and accounted for 2 percent of U.S. sales versus 2.3 percent at BMW.

Daimler anticipates an extra sales boost for Mercedes-Benz from more efficient V-6 and V-8 engines and is working to raise its profile with racing driver Michael Schumacher piloting its Formula 1 cars.

BMW will use the Geneva show to present a revamped 5- Series, which shares as much as 70 percent of parts and technology with the top-of-the-line 7 Series, as the Munich- based carmaker attempts to regain the lead from the E-Class in the market for sedans costing about $50,000.

Audi will introduce the A1 subcompact at Geneva, beating Mercedes with a new model in the growing small-car segment. Daimler is searching for a partner to supply engines to a new line of Mercedes-Benz compact vehicles and expand the Smart city-car brand.

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