Mercedes-Benz has been knocked off its residual value throne in the United States, Automotive News reported, noting that the German marque is among the losers in a new forecast of the future resale value of used vehicles while Cadillac and Nissan's Infiniti luxury brand scored big gains in Automotive Lease Guide's 2004 residual value rankings.

Mercedes' 2004 model vehicles are projected to retain an average of 52.0% of their sticker price after three years, down from a predicted 54.5% for 2003 models, the newspaper said, acknowledging that the figure is still well above the 49.0% industry average though the German brand has slipped from first place to fourth, behind BMW, Lexus and Acura in the luxury brand rankings.

Automotive News said Automotive Lease Guide, of Santa Barbara, California, bases its predictions on factors such as segment competition, fleet sales, new vehicle prices, incentives and brand history and publishes separate rankings for luxury and non-luxury brands.

Automotive Lease Guide president Raj Sundaram reportedly linked Mercedes' slide to its aging product line and to BMW's and Lexus' successful product launches and said Mercedes' widely publicised quality problems probably were an indirect factor, too.

"It's definitely been surprising to see Mercedes resale values drop this year," Sundaram told Automotive News, adding: "They've always enjoyed a premium over these brands. For them to slip is an anomaly."

Mercedes-Benz is not overly concerned, spokeswoman Donna Boland told the paper. The residual value fluctuations are based on product life cycles, she reportedly said, and many Mercedes vehicles are nearing the end of their cycles and will be replaced in 2005 and 2006.

"I don't think our residuals are anything to apologise for," Boland told Automotive News. "They've always been among the highest in the industry. We're on the verge of the largest product defensive in our history. We expect to see residuals to reflect that," she reportedly added.

Automotive News said Cadillac's anticipated average three-year residual value is 45.6%, up from a projected 40.7% for the 2003 model year while Infiniti went from a projected 45.1% in 2003 to 51.1% in 2004.

The paper said the GM brand remains below the 49.0% industry average in the luxury category and, despite its impressive gain, ranks 10th out of 12 luxury brands - it was in 11th place in 2003.

Residual value is the most important barometer of the health of a premium brand, Cadillac General Manager Mark LeNeve said in an interview with Automotive News in August.

He reportedly admitted that the Big 3 have some catching up to do but said Cadillac has made good progress with vehicles such as the SRX sports wagon, CTS sedan and Escalade SUV.

Automotive News said Honda is the top non-luxury brand in 2004 with its models expected to hold 53.7% of their sticker value after three years, while Toyota is a close second with a projected 52.6%.