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Published on October 4, 2007

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With the luxury-car market contracting 20 per cent in the first nine months and expected to reach only 6,500 units for the full year, compared with 8,000 last year, Mercedes-Benz has been able adopt several strategies to perform above the market average. Sales have dropped only 10 per cent, said Wolfgang Huppenbauer, president of DaimlerChrysler (Thailand), the distributor of Mercedes-Benz cars in Thailand.

"Earlier this year, we predicted a drop in the luxury-car market, which is the case right now. While the total car market has dropped by 10.9-11.0 per cent, there is a bigger slump in the luxury-car market, and our dealers have been working very hard to achieve the current figure, " he told reporters at the launch of the C-Class yesterday.

Mercedes-Benz dominates the luxury-car segment, with a market share of almost 50 per cent, he said.

The new C-Class introduced yesterday was an imported completely built-up version that is offered now while the locally assembled completely knocked-down (CKD) version will be ready in next year's first quarter.

Huppenbauer said the sales target of the imported C200 Kompressor, priced at a hefty Bt3.99 million, is only 100 units. The CKD version is expected to be slightly cheaper.

Stephan Moebius, vice president for sales and marketing, said the company planned to sell up to 1,000 new C-Class cars next year after the CKD version was launched.

This year, Mercedes-Benz hopes to maintain its performance in the first three quarters and sell a total of 3,500 units, which Huppenbauer describes as "ambitious".

Moebius pointed out that other luxury brands were also not doing well.

"I don't think others can reach their own targets, but this is not because of bad work, but the economic environment," he said.

Moebius said there were consumers with the money to purchase luxury cars but that they were sitting "two inches above their money".

Luxury brands are hoping the December 23 election will return consumer confidence and that sales will improve next year.

Yesterday's launch by DaimlerChrysler (Thailand) of the new C-Class follows previous launches staged by independent, or "grey market", importers.

Grey-market importers have been stealing a considerable number of sales from DaimlerChrysler (Thailand), since they are able to offer new models before the authorised dealership, thanks to strong connections with British Mercedes-Benz dealerships.

Regarding competition from grey-market dealers, Huppenbauer said, "We really cannot avoid it totally, so our customers must have the patience to wait for cars sold by the authorised dealerships. What we can offer is superior service from our dealers, as well as other packages."

Moebius also noted that steps were being taken to ensure that grey-market importers did not have a significant effect on DaimlerChrysler sales. He said grey-market sales would be considerably lower than announced by independent importers.

Meanwhile, as the CKD C-Class is being prepared, outgoing models of C-Class cars must be cleared.

Moebius declined to disclose the number of old C-Class cars left in stock but did say the figure was about right to keep Mercedes-Benz dealers in business before the CKD version became available. The C-Class is the most popular Mercedes-Benz model, with 6 million units sold around the world to date.

He also said large numbers of promotions allowed customers to purchase the old C-Class more easily, either through cash payments or financial packages.

Kingsley Wijayasinha

 The Nation