Mercedes risks los­ing lux­ury car mar­ket dom­i­nance as chal­lengers like Tesla rise

Global Times - Weekend - - AUTO -

Mercedes-Benz sold 2.31 mil­lion pas­sen­ger cars last year, which was prob­a­bly enough to make it the top-sell­ing pre­mium au­to­mo­tive brand in 2018, al­though some an­a­lysts are ques­tion­ing how much longer Ger­man man­u­fac­tur­ers can dom­i­nate the lux­ury car in­dus­try.

BMW, Audi and Daim­lerowned Mercedes-Benz have held sway in the mar­ket for high-per­for­mance lim­ou­sines for decades, but an­a­lysts warn a shift to­ward elec­tric and au­ton­o­mous cars could open the door to new chal­lengers, such as US-based man­u­fac­turer Tesla.

“The ques­tion is whether Tesla is the Ap­ple of the auto in­dus­try and the es­tab­lished pre­mium brands will be­come the Nokias and Black­ber­ries,” UBS an­a­lyst Patrick Hum­mel said, re­fer­ring to Ap­ple’s suc­cess­ful dis­rup­tion of the mo­bile phone mar­ket that Nokia and Black­berry once dom­i­nated.

Tesla de­liv­ered 245,240 ve­hi­cles in 2018, ac­cord­ing to the com­pany.

The suc­cess of the Ger­man car­maker is based on the sales of in­ter­nal-com­bus­tion ve­hi­cles at a time when cus­tomers are seek­ing newer elec­tric cars with so­phis­ti­cated soft­ware- based in­fo­tain­ment sys­tems.

Ger­man car pro­duc­ers are also launch­ing elec­tric ve­hi­cles, but their prof­its come mainly from sales of high-horse­power diesel and gaso­line ve­hi­cles.

Mercedes-Benz posted a new sales record last year thanks to an 11 per­cent sales jump in China, the world’s largest car mar­ket, while sales in the US and Europe fell 6.3 per­cent and 2.3 per­cent, re­spec­tively.

Sales of its flag­ship S-class sa­loon were up 12 per­cent, while more than one-third of cus­tomers chose to buy a sport util­ity ve­hi­cle (SUV), and about 25 per­cent of sales were com- pact cars, Mercedes-Benz said.

“In 2018 Mercedes-Benz was at the top of the pre­mium seg­ment in the au­to­mo­tive in­dus­try for the third year in a row,” said Daim­ler Chief Ex­ec­u­tive Di­eter Zetsche.

An­a­lysts said the com­pany stayed ahead of BMW and Volk­swa­gen-owned Audi thanks to in­creased pro­duc­tion ca­pac­ity in China.

“Mercedes cur­rently has a sig­nif­i­cant lead over BMW and it is a two-horse race for now. Audi will be be­hind for a num­ber of years,” Nord LB an­a­lyst Frank Sch­wope said.

BMW Group, which in­cludes the Mini and Rolls- Royce brands, sold 2.49 mil­lion cars last year.

Hum­mel said Tesla could pose a threat in the medium term be­cause it of­fers bet­ter con­nec­tiv­ity and over-the-air up­dates.

“Tesla has a lead of three to four years in ar­eas like soft­ware and elec­tron­ics. The mil­len­ni­als are much more fo­cused on these things. There is a risk that the Ger­mans can’t catch up,” he said.

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