German Car Zone

WSJ article today:

Mercedes to Lose Crown
In Luxury Cars to BMW

By STEPHEN POWER
Staff Reporter of THE WALL STREET JOURNAL
December 15, 2005; Page B4

STUTTGART, Germany -- After a year of quality trouble, job cuts and management turnover, DaimlerChrysler AG's Mercedes-Benz division is set to suffer another indignity: losing the title of world's best-selling premium brand.

With less than three weeks left in 2005, the auto maker is on track to cede its global premium-brand sales crown to archrival BMW AG's core BMW brand, in what would be the first year BMW has outsold Mercedes on an annual basis since 1993. In the first 11 months of 2005, Mercedes-Benz has sold 961,600 vehicles world-wide, compared with 1,020,156 for BMW, according to the companies.

"Being No. 1 is what they [Mercedes officials] live for," says Christoph Sturmer, an analyst with the Frankfurt office of Global Insight, a sales forecasting firm. "Their message is 'if you want to buy the leading premium brand in the world, buy a Mercedes.' "

The shift in the two auto makers' standings is the latest illustration of broader problems at DaimlerChrysler's luxury division, and of the increasing competitiveness of the premium-car market.

DaimlerChrysler spokesmen play down the significance of losing the global sales crown to BMW, noting that Mercedes-Benz sales globally are again rising after a slow start. With four models launched in 2005 -- a record for the brand -- Mercedes officials hope to continue their momentum next year when the new version of the brand's flagship model, the S-Class sedan, goes on sale in the U.S. following a big rollout at the North American International Auto Show in January.

In the latest sign of BMW's strength, data released yesterday showed new registrations of BMW vehicles in Europe rose 9.5% in November from a year earlier. BMW has been helped by the launch of its redesigned 3 Series sedan, its top-selling model. Mercedes's new registrations -- which closely track sales -- rose a much slower 3.1%, according to the European Automobile Manufacturers Association.

While Mercedes's European market share remains unchanged this year -- at 4.6% -- the BMW brand's share has risen to 4.2%, from 3.7% last year, the association said.

The European car makers group said overall new-car registrations fell nearly 3% in November, to 1,111,457 automobiles from 1,142,992 a year earlier, indicating "a stagnation of the market." Through November, overall registrations of new cars in Europe have risen less than 0.1%, to 13,486,560, from 13,479,569 during the year-earlier period. Particularly hard hit in November: Ford Motor Co., whose registrations fell nearly 6%, and Renault SA, whose registrations fell 15.3%.

The tight sales race between Mercedes and BMW is unfolding as Toyota Motor Corp.'s Lexus division, the leading brand in the U.S. premium market, is increasingly seeking to challenge the German companies on their home turf in Europe. Although Lexus lags far behind Mercedes and BMW globally -- its world-wide sales are expected to total just below 400,000 vehicles by year's end -- Toyota wants Lexus to become a global premium brand, and is expected to let Lexus continue chipping away at the German auto makers.

Reviving Mercedes is key for DaimlerChrysler and incoming Chief Executive Dieter Zetsche, who has been running Mercedes since September, and is set to add the CEO job Jan. 1. Mr. Zetsche, who previously led a turnaround of the Chrysler division, took over Mercedes in September after several changes at the top of the luxury unit. His predecessor, Eckhard Cordes, ran Mercedes before resigning in July after being passed over for the CEO job that went to Mr. Zetsche.

In good times, the Mercedes Car Group -- which includes the superluxury brand Maybach, and Smart, a maker of tiny premium cars -- accounts for more than half of the full company's operating profit. But for the first nine months of this year, the division has run up losses of roughly €500 million, or $596 million, partly because of quality problems at Mercedes-Benz that forced a huge recall last spring, and because of mounting losses at Smart.

Under Mr. Zetsche, the Mercedes division announced plans in September to eliminate 8,500 jobs in Germany to reduce costs. At the same time, Mr. Zetsche is expected to continue to keep an eye on Chrysler, which -- though profitable, and in better shape financially than General Motors Corp. and Ford -- earns far less than Japanese car makers and faces bitter price competition from GM and Ford.

Wicked... Hopefully BMW growth is not stopped...Mercedes had it coming for various reasons

Wow its amazing how many threads we had on this subject..
Dont get me wrong though.
MB had it coming.. and big respect for BMW putting it down..
But seriously there is not much more to say that hasent been said on this subject..

Great news!

What I found interesting was this little fact:

I guess that dispells the arguement that some have made on this topic that BMW's successes are attributable to the fact they they've introduced some new models, because so have MB.

I know I shouldn't beat a dead horse so to speak... but I will congratulate BMW and their Management... excellent news, over a million cars sold in the year.

Christmas has come early to BMW (and their fans).

BMW surpassed MB in 1993, 1995 and 1995 by small margins.
Why the hell is Lexus doing here ?!
So pissed by amarican jurnalist putting Lexus in here for nothing.
It's BMW, MB, Audi, Volvo and than Lexus.
Man, wouldn't it be nice if MINI would one day surppass Lexus.
How cool would that be.

BTW Lexus must have some of the worst engineers in the world. The managed to make the 4.57 m long IS250 to have only 378 lt trunk space (almost the same with VW GOLF).

IS250.. well I guess a lot of space, both trunk and passenger is sacrificed for the exterior look... It is shorter than the 3series but yet the shape is as sleek, and that equals less space, less headroom for everything..

I think MB will be strong next year, before the next X5 comes out which from latest CGIs do NOT seem to look so good, the ML will sell very quickly.. i mean in NZ, they dont' even have a spare one in the showroom! The S will of course sell much more than the 7, probably stalling the 7series' sales... At the moment, i'm in Hong Kong and there are quite a few E65s around, quite a lot of facelifted ones as well, i guess this is because the old Sclass really is aging and BMW here i think has competitive discounts...