CEO Dieter Zetsche of Daimler is determined to surpass BMW in terms of luxury vehicle sales, armed with a range of new Mercedes-Benz models intended to reverse the automaker's decline in market share. At the company's annual meeting in Berlin, he told shareholders that the company is "is on the way to its best form, but is not there yet."
Zetsche further stated that they are "confident" that they can "do more, and that also applies to the share price." The annual meeting is the last chance for Zetsche, who also heads the Mercedes car division, to sell his strategy to shareholders before his contract is up for renewal. He is launching models like the entry-level Mercedes-Benz A-Class hatchback and new versions of the S-class flagship in an effort to get back the lead position in the luxury vehicle race that Daimler lost in 2005.
The new models are intended to increase sales growth, which averaged 1.4% during the past decade, compared with 7.4% percent at Audi and 6% percent at BMW, according to IHS Automotive's data.
The slow development caused Mercedes' share of the luxury vehicle segment to fall from 25% in 2001 to 21.4% last year. According to Stefan Bratzel, the director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, the Daimler CEO has determined the weaknesses and is "heading in the right direction, but the competitors are ambitious too."
He further stated that Mercedes will find it hard to catch up. He also shared that a successful introduction of the A class will be a "litmus test" for the strategy. Mercedes intends to launch the youth-oriented A class in September to rival the A3 of Audi and the 1 series of BMW.
This vehicle model is also aimed at attracting new clients to the brand. The sporty A class will be founded on the Mercedes new front-wheel-drive architecture to reduce costs, similar to at least four other small vehicles including a compact sport-utility vehicle and the four-door CLA coupe.