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Customer LoginsMercedes-Benz posts record July sales, considers separate EV brand
Mercedes-Benz posted another very strong month of sales as it continued on track to surpass BMW for the full year in 2016.
IHS Automotive perspective
- Significance: Mercedes-Benz posted another record with its highest ever July figure of 163,770 units, which was an increase of 9.4% y/y. In addition it has also been reported by Bloomberg that the company is looking to introduce a separate standalone brand for EV models.
- Implications: July's sales figures show that the brand remains on track to take the title of the best-selling premium brand from BMW this year, benefiting from a dynamic and young model range with models like the new E-Class and GLC SUV further boosting sales momentum. If Mercedes-Benz cars does introduce a separate EV brand it will be an interesting move and will help distinguish the company's alternative powertrain offerings is a fashion similar to BMW's "i" sub-brand.
- Outlook: For the full year IHS Automotive currently forecasts that Mercedes-Benz will overtake BMW as the world's best-selling volume premium car brand with 1.98 million to 1.93 million as the company's turnaround vindicates the management of CEO Dieter Zetsche and his team.
The Mercedes-Benz passenger car brand posted another month of record sales in July to continue on its recent very positive sales track, according to a company press release. It posted a 9.4% year-on-year (y/y) increase to 163,770 units, which was a record high figure for the month of July, and also generated sales growth in all three of its main regional markets, Europe, Asia-Pacific and NAFTA. Combined brand sales in the first seven months of the year increased by the accelerated figure of 11.7% y/y to 1,170,389 units which is also a new sales record for the combined period for the first seven months of the year. Commenting on the very strong result, Daimler board member for Mercedes-Benz cars sales and marketing Ola Källenius said, "The year of the E-Class and the dream cars has been progressing very successfully for us. The new E-Class Saloon is extremely popular with our customers. And we delivered around 12,000 of the dream cars to our customers in July. Our new models are strengthening the Mercedes-Benz brand while further rejuvenating the product range." Smart sales also enjoyed a strong month with a 13.8% y/y increase to 10,567 units in July and a 17.7% year-to-date (YTD) increase to 84,077 units.
On a region by region basis, sales in Europe rose by 6.2% y/y to 68,990 units in July; the YTD sales increase in the region stood at 12.3% y/y with a figure of 513,571 units. The big sales markets in Europe for generating growth were the UK, Italy, France and Spain, which all generated double-digit percentage growth in the first seven months of the year. In Asia-Pacific, sales increased by 19.7% y/y in July to 57,260 units, with the vast majority of this growth being generated in China. Sales in the world's largest passenger car market posted a highly accelerated rise to 26.2% y/y to 37,277 units in July although this was a marginal slowdown on the YTD increase of 32% y/y to 257,256 units. In NAFTA, sales rose by 5.4% y/y in July to 33,185 units; 28,523 units of this total were generated by sales in the US, up 3.6% y/y. YTD sales in the US fell by 0.6% y/y to 191,300 units. On a model by model basis, SUVs remain a massive growth catalyst for the brand with sales by 43.7% y/y in July to 56,297 units, with the ultra-successful GLC doubling its sales in comparison to July 2016. The new E-Class was also a strong seller, now having been launched in all major global markets. The new long-wheelbase variant of the model was launched in China in the final three months of the year. What the company describes as its "dream cars" - its coupé and cabriolet ranges - also posted strong growth, helped in particular by the C-Class coupé, with a 19,6% y/y uplift in this model type to 12,000 units during July.
In addition, Bloomberg has reported that Daimler is considering launching a new sub-brand to cover a number of standalone electric vehicles (EVs). The aim is to make the company's EVs offerings distinct in a similar fashion to BMW's "i" brand and create a clear competitor to Tesla's EV offerings. According to the reported plan, Daimler will create two electric SUVs and two sedan EVs under the new brand, although no name has been decided for the brand at this point. Mercedes-Benz has previously avoided building bespoke EVs in the manner that BMW has with the "i" range while building EVs based on existing models. Daimler has previously stated that it will launch a new EV SUV with a range of 500km, which will form the basis of a notional rival to the Tesla Model X when it makes production, something which it set to do by 2018, according to Daimler's outgoing head of R&D Thomas Weber. Christoph Sedlmayr, a spokesperson for Daimler, declined to comment on the number and model type of electric cars planned, or whether they would be offered under a separate brand, but he did confirm there will be more than one.
Outlook and implications
These July sales numbers confirm that Mercedes-Benz passenger cars remains on a very strong growth track, something that it needed to maintain if it is to achieve the goal of overtaking BMW as the world's best-selling volume premium passenger car manufacturer. The company is in a phase of range expansion; there has been a significant increase in the number of model variants being offered in the past five years. This has included the massive expansion in its compact car range, based on the front-drive MFA platform, and the expansion of its SUV and crossover range. With the help of chief designer Gorden Wagener, ultra-efficient conventional powertrains and in-car connectivity systems and equipment that is arguably more intuitive and easier to use than most rivals mean that Mercedes-Benz is winning new sales and conquest customers with arguably the most compelling range of cars in the firm's history. New compact cars like the CLA and GLA crossover have brought a younger customer demographic to a brand that has traditionally had a rather conservative image, although this perception is changing rapidly, while core passenger car ranges such as the C-Class and E-Class are as competitive and as near to class-leading as its possible to get. For the full year IHS Automotive forecasts Mercedes-Benz passenger cars to sell 1.98 million units to best the tally of BMW of 1.93 million units. However, BMW is forecast to take the lead back towards the end of the decade, although the race is set to be very close. The idea to create a bespoke sub-brand for EVs in an interesting one, and if it transpires it will help make the company's offerings distinctive and reiterate their position as Mercedes-Benz cars technology leaders, much as the BMW "i" range has done. However, establishing a new brand also has significant cost implications in terms of marketing and dealership infrastructure, although the new brand would almost certainly share space with Mercedes-Benz at existing dealership locations.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.