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NEWS
Supply side strain for Mercedes-Benz
Record sales posted last year, yet the three-pointed star still can't meet local demand2013 was the year of the prestige brand in Australia. While the majority of volume-selling companies actually lost ground in the record-breaking market, the German brands, Jaguar Land Rover and Lexus all picked up sales in varying degrees.
It proved to be a particularly good year for Mercedes-Benz, which not only broke through the 20,000-unit prestige sales barrier for the first time, but went on to register over 3000 more sales before December 31. Of the total 23,106 Benz passenger cars and SUVs sold, 1649 were high-performance AMG models – accounting for about seven per cent. That figure represented a new record for Mercedes-AMG in Australia, thus making the local market one of the most important in the world for the iconic performance brand, on a per capita basis.
Much of the AMG stable's success in Australia is attributable to the new era of MFA-based four-cylinder variants – such as the A 45 AMG. But the A 45 was in short supply from the moment it went on sale here, much like the lesser A-Class models too.
"A-Class we could have sold at least another thousand, if we had them... easily," David McCarthy, Senior Manager for Corporate Communications at Mercedes-Benz Australia, told motoring.com.au yesterday.
Supply was so tight for the new-to-market A-Class that was it was beaten by the larger, more expensive B-Class, albeit "only by 30 units..."
It is a situation likely to recur when the GLA is launched shortly, with the AMG variant to follow in the fourth quarter. That car will not be far removed from the CLA 45 AMG sedan in price, McCarthy suggested, although MB Australia is still in negotiations with the factory to nut out an appropriate price.
"I'd be looking around CLA 45 price," said McCarthy. "We haven't locked in spec and stuff yet. It's a bit early to say, but it'll obviously be competitive."
As to the GLA 45 being positioned closely to the CLA sedan variant, McCarthy hinted that pricing the GLA 45 much above the price point of the CLA version might price it out of the park.
"It's that balance between volume and contribution," he said. "Certainly the days of pricing a car where you think you can get the maximum for it [are gone]. The market's way too competitive for that."
Part of the problem seems to be that Benz doesn't quite know how to position the GLA 45 AMG in this market.
"It is a niche within a niche, although I suspect that it's going to experience the same sort of demand as the other 45s," McCarthy said. The feedback driving that view comes from the Benz dealers around the country.
"Again, for that car, supply is going to be a problem for us. Indications from dealers, in terms of the level of interest, is pretty high. I think it's going to be a bit of a challenge.
"In a way it's a good position to be in, but it's not ideal... we'd like to have more, certainly. The same as A-Class, B-Class..."
Australia is not the only market in the world where Benz is over-extended supplying cars for buyers, McCarthy explained, in answer to the question of the factory's response to the untapped demand.
"You get a handful here and a handful there – and it makes it better. We're in the same situation as every other market. The factory's running at capacity. Just getting more is problematic.
"Mercedes-Benz UK... passed 100,000 units.
"The US market is huge, but of course they don't get A-Class and B-Class. They [do] get CLA, and that is having some impact on our supply.
"You've either got too many or not enough."
Mercedes-Benz is not alone in going through these growing pains, but Stuttgart is probably the brand hardest hit. The imbalance between supply and demand for prestige vehicle sales around the world is a product of the global financial crisis from six years ago, McCarthy indicated.
"These are the effects still being felt to an extent from the GFC... [car manufacturers] made some big cuts, and cut right back on production... a lot of manufacturers – us included. And to build that up again takes a long time. If you got burnt during the GFC – which a lot of companies did – you're gun-shy."
In the meantime, Mercedes-Benz Australia finds itself in the unusual situation of selling exclusive product – when it has been intentionally pushing for larger sales volume.
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Written byKen Gratton
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