DaimlerChrysler is delaying the US launch of its Mercedes-Benz B-Class sport wagon over concerns that the weak dollar would eat too deeply into profits, the automaker told the Associated Press (AP).
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The compact four-door hatchback was to have been brought out in North America this year, DaimlerChrysler spokesman Toni Melfi reportedly said, but the company has decided to bring the vehicle out in Canada and Mexico as planned but wait to introduce it to the United States.
“Given the current dollar-to-euro relationship, the launch is being delayed for now,” Melfi told AP.
The news agency noted that the move comes just weeks after DaimlerChrysler presented the car at the North American International Auto Show.
The Associated Press said the euro rose from around $US1.20 in September to an all-time high of $1.3667 at the end of December over concerns about the increasing US trade and budget deficits – it has since been trading around $1.30, but many analysts think it still could hit $1.40 this year.
The weak dollar has been good for US exports by making them less expensive for overseas customers, but has the opposite effect on euro-zone goods, making them more expensive in the United States or eating into manufacturers’ profit margins as they try and keep prices steady, AP noted, adding that the B-Class Mercedes is to be built at DaimlerChrysler’s factory in Rastatt, Germany.
Melfi reportedly declined to say when the launch would take place, but stressed that the exchange rate had to be “substantially better.”
The Associated Press said that the delay in the B-Class’s US launch reflects the sensitivity of the Mercedes division to foreign exchange rates and suggests that the Stuttgart-based car maker is uncertain about the small wagon’s prospects in the US market.
