The chief executive for Daimler had been managing the German auto manufacturer of luxury cars for only a short time before the year 2006 when he decided to begin thinking outside the box with innovative new ideas.
In the year 2006, Mercedes was behind its main rival, BMW, and was in danger of begin passed up by Volkswagen as well, with its new line of Audis. The chief executive decided that it was time to change things up and go for a smaller model, even though Mercedes is widely known for building its larger and stronger sedans which were favored by the upper class and rich consumers.
The chief executives thought behind the idea was that it would bring in a new demographic which previously was not interested in Mercedes, particularly those of the younger generation who would then stick with Mercedes for the rest of their lives. He commented that the Mercedes brands had been seen as growing slowly, more slowly than companies such as BMW and Audi, this and this was not good for business.
The first mini Mercedes was revealed at the International Frankfurt Motor show in September this year. The car is designed in a similar way to the classic Mercedes, and it is planned to be applied to different types of smaller cars, such as a sport-utility vehicle and a hatchback.
The new scaled down B-Class vehicles will begin at a sticker price of 26,000 euro’s, which is considerably less than the 32,700 euro’s which the Mercedes C-Class sedan costs, and the 71,000 euro’s which the S-Class costs.
Daimler has decided to begin investing over 1.4 billion euro’s towards the small vehicles. It is hoping that with the new smaller models, it will once again rank in first place for global sales of luxury vehicles, by the year 2020. The chief executive commented that it could not afford to stay at number three, as its customers would not be happy with that.
Mercedes was still clearly at the top in 2010, with deliveries of over 233,000 vehicles more than what BMW was delivering, and 390,000 more than Audi was delivering. But since then, BMW and Audi have increased their sales by nearly five times over what Mercedes is selling.
This is likely due to the fact that they have both moved on into new markets with vehicles like the compact SUV, and they have also moved into international markets such as China and other nations which are growing quickly.
In the first months of this year, Mercedes has fallen behind BMW by 95,200 sales and 54,700 sales behind Audi.
Those who purchase Mercedes vehicles in the United States are typically older, at an average age of 54. This shows that Mercedes will need to begin to appeal to a younger audience if it wishes to remain competitive in the auto industry.
Experts have commented that the biggest challenge for Mercedes, will be to attract a younger demographic. Mercedes has recently hired a younger design chief, in order to give the company a younger appeal and brand image.