Mercedes expects solid U.S. sales in 2007

Reuters / January 9, 2007 - 8:07 am DETROIT (Reuters) -- DaimlerChrysler's Mercedes-Benz brand is set for another solid year of U.S. sales in 2007 even if the world's biggest economy weakens, Mercedes Car Group sales and marketing chief Klaus Maier said on Monday.

The advent of the revamped C-Class car in August will help complement good demand for other relatively new products in the Mercedes-Benz lineup that helped 2006 U.S. sales rise 11 percent to 248,000 vehicles, he told Reuters.

"If you go with the right products at the right time there is enough purchasing power to get the volume we want to have in the U.S. market," he said at the North American International Auto Show.

"With the new C-Class coming in the middle of the year this will give us enough momentum. I think we have still not fully exploited the potential of the existing products like the S-Class (executive car) and ML and GL (SUVs)."

"These are all brand new cars. We see the demand is still there and that should help us until the C-Class can pick up. That is why we are not pessimistic even if the economic environment gets more modest," Maier said.

He did not give a specific sales forecast but said sales would not grow at a double-digit rate every year.

U.S. sales of the R-Class sports wagon did not get off to a brisk start as the market sought to figure out just where the crossover fit in. Maier said Mercedes may have launched the model slightly ahead of its time.

"I think we will attribute more features in 2007 to the product, which gives it more momentum for the market. That will help us," he said.

Mercedes-Benz has led the German charge to promote diesel cars in the U.S. market, and Maier said it was seeing its first successes. U.S. sales of diesel-powered Mercedes-Benz cars rose 60 percent last year to around 7,000 cars, but still made up only 3 percent of its overall U.S. sales.

Maier said estimates that diesel's share of the U.S. car market could hit 10-15 percent by 2015 were "not unrealistic" depending on how fuel prices develops.

Given high fuel prices, Maier said the group would consider launching a small Mercedes-Benz car in the U.S. market at some stage, but only with future generations of products.

"There are two hurdles we have to overcome. The first is it should not hurt the brand perception of Mercedes, which is different in the United States than in Europe. It is a luxury car and we want to keep that brand perception," he said.

"The second is profitability. It doesn't make any sense for the company if we go just for the sake of volume. It must be profitable at the dollar/euro exchange rate existing then."

The group dropped plans to sell its Mercedes B-Class compact car in the United States because the strong euro undermined the business case, but it has not ruled out U.S. sales for the next generation of the car due next decade, Maier said.

For years Mercedes strategic planning has been based on an exchange rate of $1.35 to the euro, he said, not far removed from current rates just over $1.30.

The group's snub-nosed Smart two-seater makes its U.S. debut early next year.