Mercedes Benz is losing its importance in the global markets
|   Sunday, June 02, 2013
Mercedes Benz is the company that people used to look at as a brand of luxury cars. In recent times the trend has changed quickly. The company no longer holds the highest sales in the world. It has fallen behind to its competitors like BMW and Audi. There are many reasons that have led to this unwanted result for the company in the global markets.

Daimler is the parent company of the Mercedes brand. The parent company is the leading producer of big trucks in the global arena.
However Daimler has not been successful in promoting Mercedes upwards. The company chief says that the failure of the company in the global market is due to the low sales in the Chinese markets.

China is considered the world's largest car market and Mercedes has lost ground quickly to its competitors BMW and Audi. The sales of the company have fallen by 11% in the 1st quarter where as the others have gained a lot on sales and profits. Though luxury cars have a small market they account for a lot of profits.

Mercedes stocks have gone up by a mere 14% in the last seven years where as the stocks of BMW and Volkswagen's Audi stocks have shot up dramatically in the same time period. The reason is that Mercedes has been producing only luxury cars. The others have been producing luxury cars as well as smaller cars. This has led to an increase in their sales.

Audi has a tie up with a major company like VW that allows them to gain a lot in terms of engineering expertise as well as cutting down costs due to the global production facilities of VW. Though BMW does not have any tie up it has a wide range of cars to choose from. That makes the company more competitive. Even General Motors has a tie up with Cadillac. These are factors that Mercedes cannot duplicate so they have to think of other ways.
Mercedes is still the no 1 luxury car brand in the US. However to make this count they have to increase their sales in China. The strategy that Mercedes had launched in China miss fired against the company. They appointed two distributors who started competing against each other with large advertisements and huge discounts. This led to a fall in the profits of the company.

Will the parent company Daimler be able to pull Mercedes out of this problem or will the company keep losing its importance can only be said with time.

At the moment Mercedes has decided to launch the CLA to compete with the adverse situations. The CLA will cost about $5000 less than the C Class which has been the company's cheapest car over the years. The CLA is aimed at the younger generation who like luxury cars. the company hopes that this car will be a success and will solve their problems.
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