Mercedes-Benz boss 'confident'

Mercedes-Benz Australia was one prominent brand that defied last year's prestige slump. While Audi sales slipped backwards by over 2200 sales (9.3 per cent) and BMW fared worse still, losing over 4400 sales in 2017 (15.7 per cent), Mercedes-Benz posted a gain of over 1100 sales for the year.

But things haven't been as rosy in 2018 for the three-pointed star. The company's global sales have taken a backward step, and VFACTS figures for September reveal that Benz sales in Australia have also fallen behind by 2818 units – of which 2474 are lost C-Class sales, year on year.

During the launch of the revised Mercedes-Benz C-Class last week, Horst von Sanden, CEO for Mercedes-Benz Australia and New Zealand, acknowledged that the importer is facing an uphill battle to maintain sales momentum this year.

"In terms of the year, I think it's fair to say 2018 so far has not been an easy year," von Sanden said. "The market is certainly difficult, and probably we have all been a little bit spoilt by the market – but also we as a company by this onslaught of new products coming basically thick and fast, ongoing for the past few years."

The Benz executive has reason to be thankful, however, in that timing of local launches for the Mercedes-Benz A-Class and C-Class coincides neatly with the downturn in sales and may 'weatherproof' the sales forecast for the remainder of 2018.

"We're happy with the results so far, given the market conditions; we're confident that the remainder of the year will be pretty good…" von Sanden remarked.

The brand's lower sales for the year to date closely follow the decline in sales of the Mercedes-Benz C-Class, as existing stock has been sold without new product initially available. Now that the revised C-Class is on sale in Australia, sales volumes are expected to return to pre-runout levels. The same applies to the A-Class.

In 2018, the sales decline for Benz has been largely offset by improving sales of the Mercedes-Benz GLC, and von Sanden pointed out that new product due next year will keep sales on the up and up in 2019. These new models include the next Mercedes-Benz GLE, the A-Class sedan, AMG GT four-door coupe and the EQC electric SUV.

In addition to the challenge of keeping sales on the boil while replacing existing product with new product, Mercedes-Benz and other prestige brands have been held back by other market factors. The company is anticipating "a bit more stability in Australian politics" to use von Sanden's words.

But the housing market is also having some considerable impact on sales of prestige and luxury cars, according to Mercedes-Benz.

It has been popular wisdom in recent years that aspiring first-home buyers locked out of the housing market have spent their money on nice cars. But those aren't typical Mercedes-Benz buyers. The sort of people to buy Benzes are more likely to be property investors – people long past their first home.

However, even these well-to-do folk are finding the going tough, with real estate prices spiralling upwards, but building materials are rising rapidly in price also.

This is apparently due to the demand for materials to satiate the fast-paced construction industry – building approvals coming close to 32,600 in Victoria alone last year.

So in addition to the usual hopes and aspirations for new models arriving in the market, Mercedes-Benz will no doubt have collective fingers crossed for an earlier federal election – whichever side of politics wins – and a more resilient outlook for investors in the local housing market.