January 11, 2012, 11:52 AM EST
By Craig Trudell
Jan. 11 (Bloomberg) — Bayerische Motoren Werke AG and Daimler AG’s Mercedes-Benz are boosting incentives and are emphasizing sales leadership instead of brand value, said Earl Hesterberg, chief executive officer of Group 1 Automotive Inc.
“The conclusion of every month brings more comments and boasts regarding which brand is selling the most,” Hesterberg said in a speech today at the Automotive News World Congress conference in Detroit. “Quantity seems to be surpassing quality and brand value in terms of emphasis.” He called rhetoric of BMW and Mercedes “concerning.”
Mercedes said Jan. 9 that it held back final 2011 U.S. sales results earlier this month because the luxury brand suspected BMW would adjust its own number to overtake them as No. 1. BMW, which snapped the Toyota Motor Corp. Lexus brand’s 11-year run as the top-selling premium automaker in the U.S. last year, denied the accusation while taking a swipe at Mercedes’s incentive spending.
BMW outsold Mercedes by 2,715 vehicles in 2011 in the U.S. Mercedes and BMW both waited until Jan. 5 to release results, a day after other automakers announced final figures. Ultimately, Mercedes announced its results about two hours before BMW did.
“The luxury brands seem to be locked in a perpetual sales contest no different than the Ford versus Chevy wars of several decades,” said Hesterberg, who runs the fourth-largest U.S. dealership group and is a former Ford sales executive.
BMW, including its Mini non-luxury brand, accounted for 13 percent of Houston-based Group 1’s new vehicle sales in the first three quarters of 2011 while Daimler brands including Mercedes were 5.5 percent. Group 1 disclosed the figures on Oct. 25 when it reported third-quarter financial results.
Fight to Continue
Both BMW and Mercedes say they expect the fight for luxury supremacy to continue this year. Mercedes forecasts its U.S. sales to rise at least 10 percent in 2012, aided by the refreshed C-Class.
BMW predicts its U.S. sales will rise as well, helped by the introduction of its redesigned 3-Series compact sedans. Ludwig Willisch, chief executive officer of BMW of North America, declined to say how much sales would increase. He said BMW would remain No. 1 in the U.S.
Sales of Munich-based BMW’s luxury vehicles rose 13 percent to 247,907 last year, boosted by the redesigned X3 sport-utility vehicle, while Lexus sales fell 13 percent to 198,552.
Mercedes narrowed the gap with BMW toward the end of the year, helped by a refreshed C-Class compact sedan and new coupe. Stuttgart, Germany-based Mercedes saw sales rise 13 percent to 245,192 in the U.S.
The results exclude Daimler’s Sprinter and Freightliner vans, Smart cars and BMW’s Mini brand vehicles, which aren’t luxury models.
–With assistance from Tim Higgins in Detroit. Editors: Bill Koenig, John Lear
To contact the reporter on this story: Craig Trudell in Detroit at ctrudell1@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net
