Daimler still undecided on whether to enter luxury subcompact segment

Article by Anita Panait, on April 17, 2013

Daimler AG has yet to reach a final decision whether to barge into luxury subcompact car segment, just like what its fellow German carmakers have already done. It could be because the German carmaker has yet to find ways to keep costs down and volumes up to earn profit from any future small Mercedes-Benz model.

Subcompacts are best known volume models like the Volkswagen Polo, Renault Clio and Opel Corsa. It is known that margins in the subcompact sector have traditionally been tight while buyers are motivated by value. However, Audi's A1 and BMW's Mini have demonstrated subcompact drivers are willing to pay a premium for quality and style.

Although Daimler offers the tiny Smart microcar, its smallest Mercedes is the A class, which is aimed at BMW 1 series and Audi A3. German weekly Focus recently reported that Daimler was planning to position a new Mercedes model due in 2016 above the Smart. The new model will be based on the A-class architecture and will be powered by engines from Renault.

In March, AutoBild reported that Mercedes is mulling a subcompact car range dubbed as X-class, which will include a crossover and a minivan priced below EUR20,000. A spokesman for Daimler remarked that every once in a while, they assess whether “there is room below the A class for another Mercedes.”

Daimler’s luxury car unit is preparing for multiple model launches including the new CLA four-door sedan, the flagship S class and a major facelift of the E class. German luxury brands never dared to venture into the subcompact segment until Audi rolled out the A1 in 2010.

Investors initially expressed concern that an Audi underpinned by a Volkswagen Polo platform would not be a welcomed product from premium car buyers. Likewise, a general rule of thumb in the auto industry states that the smaller the car is, the lower the profit margin will be. However, Audi’s well-planned concept and careful price positioning allowed it to make the A1 distinct from the Polo.

The new Mercedes-Benz CLA features elegantly sporty proportions and dynamic design language, as further defined by the cordial interplay between concave and convex surfaces.

As designed, the front end of the new CLA features diamond radiator grille and bonnet with powerdomes. The headlamp housing, meanwhile, feature light modules and LED units arranged to create the so-called "flare effect" for the daytime driving lights and indicators, signifying the CLA’s vigorous looks while shaping a new Mercedes face.

There are quite a number of design details revealing that the CLA is truly a further development of the Mercedes CLS. For instance, the CLA is laden with three feature lines on the flanks. One of these is the dropping line that links the front structural edge to the rear end. A bolder line flows through shoulder muscle above the rear axle, while a third feature line runs from the front wheel towards the rear wheel.

Meanwhile, the rear end of the CLA doesn’t only emphasize the width of the vehicle but it also conveys its power and athleticism, as marked by a strong interplay between convex and concave surfaces. The coupe-like looks of the CLA – as viewed from the rear – are a result of the pronounced curvature of the rear window and the sloping roof contour.

Likewise, the sportiness of the CLA comes from the drawn-in C-pillars and the muscular lines of the shoulders, which in turn frames the taillights as they extend to the rear end. In addition, the horizontal arrangement of the lights helps highlight the dynamism and width of the rear end. Furthermore, the light functions on the rear come with an arrow-like layout.

Topics: daimler

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