It’s war. BMW wants to unseat Mercedes-Benz as the global premium brand sales leader by 2008 with 1.4 million unit sales worldwide. But Mercedes Car Group has ambitious plans of its own, and a five-year head start in the race, Automotive News Europe said.
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The battle between the two German giants for global luxury leadership will be played out not with the traditional vehicles that have made the German giants successful, but with entries into new segments the two haven’t competed in before.
Mercedes-Benz began stretching its brand with the A-class in 1997 and M-class in 1998 and will expand those two platforms dramatically in the next several years.
BMW joined the fray with the X5 sport utility in 2000. Mercedes Car Group sold 1.23 million units last year compared to 1.05 million by BMW including Mini.
“There are two big brand expansion strategies at the moment,” said John Lawson, analyst for Smith Barney in London. “Although BMW has made a lot of noise about their product portfolio expansion, Mercedes is engaged in their second expansion. The first one started with A-class, M-class and Smart. The second one involves significant expansion in three areas.”
The two companies are stretching plant capacity. BMW didn’t have room for the X3 at any of its own factories, so it’s being made by Magna Steyr in Austria. Mercedes-Benz is nearly doubling the size of its Tuscaloosa, Alabama, plant for forthcoming variations of M-class and expanding at Rastatt for A-class.
BMW has been more aggressive this year, going on a rapid-fire product offensive with the arrival of the 5 series and the unveiling of the 6 Series coupe and X3 baby sport utility. The latter two go on sale early next year.
The 6 series cabriolet will debut at the Detroit motor show in January. Later next year will come the 1 series, BMW’s excursion further into small car territory. Also arriving next summer will be the Mini cabriolet. There will be little rest for the busy Bavarian manufacturer because the all-important next generation 3 series arrives in 2005.
“We would like to grow with the 3, 5 and 7 series, but this will not necessarily be enough to grow towards this 1.4 million,” said Michael Ganal, BMW member of the board for marketing. “To defend this position, we have to continue [to enter more segments].”
The Mercedes Car Group, DaimlerChrysler’s luxury division, is not sitting idle either and will launch the next phase of its big drive in 2004 with a new A-class. The A-class-derived Compact Sports Tourer (CST) and the M-class-based Grand Sports Tourer (GST) will arrive in 2005. And Jurgen Hubbert, Mercedes Car Group chief, announced earlier this month Mercedes will go ahead with production of the Vision CLS coupe, the four-door coupe the company showed at Frankfurt in September.
Smart is transforming itself from a one-car company to a four-car company, with a new roadster on the road and a four-door version and a Smart sport utility in the works. The latter is destined for North America.
