A-, B-, C-Class: Mercedes Bets Big On Small Cars In America Page 2

September 13, 2011

The B-Class also will have cutting-edge safety systems. Rear-collision prevention will alert drivers if they're approaching obstacles too quickly, while attention assist detects drowsy driving and sends an alert in the form of a coffee-cup warning light. The compact-car family also will offer rearview cameras, blind-spot monitors, a lane-departure warning system, and active parking assistance, which uses electric power steering and parking sensors to steer into tight spaces, with the driver keeping control over braking.

In Schmidt's words, "it's the ideal car for everybody who wants a true Mercedes in a compact format."

The same architecture will spawn many body styles. Other versions planned for global markets, the U.S. among them, will include a small SUV, and a coupe-like sedan patterned after the CLS. There's yet another model in the works, though Mercedes hasn't said what body style it will take.

And as part of the family gathering, the hatchback A-Class has also been confirmed for sale in America. The A-Class concept, shown in Frankfurt as well as this year's Shanghai auto show, is 90 percent representative of the final car, says chief designer Gordon Wagener, with running gear shared with the B-Class, like its 210-horsepower four-cylinder and a dual-clutch transmission.

The price (and size) of competition

The new small cars won't be the only vehicles that will defend Mercedes' premium brand position in the compact class. niche. It will no longer be the entry-level Mercedes, but the C-Class will be even more important in the grand scheme, as the company moves some production to the U.S.

The C-Class comes to America in 2014, after Daimler completes a $2 billion expansion of the Tuscaloosa, Alabama, plant where it now builds its SUVs--the M-Class, R-Class and GL-Class. Adding the C-Class to the facility means the company will be able to build up to 250,000 vehicles a year in America, in one of its most important markets, one where production costs are markedly lower than in its home market.

Competing on size, and on cost, should keep Mercedes in good company with the likes of BMW, which has had some success in the U.S. with the recently introduced 1-Series; with Audi, which has sold the A3 in America since 2006; and with Japanese brands like Lexus and its CT 200h.

There's also a compact-car lineup coming from Infiniti, and it could have some German connections. The Nissan-owned luxury brand is now a technology partner with Mercedes, and will eventually share some four-cylinder engines and other running gear with its new partners--perhaps even a vehicle.

Ultimately, the plan for small Mercedes-Benzes is a response to the polarized market for luxury goods in the U.S. The old upper middle class is now solidly middle class, or worse, some economists would argue; while high-end buyers are shopping and spending more than ever, the potential drop-outs from luxury car brands are still looking for premium brands, but aren't as able to pay premium prices.

That's why, rather than a C-Class four-door sedan, the new affordable Mercedes could look very different three years from now. It could be a compact wagon, four-door coupe, pint-sized SUV or even a hatchback with the three-pointed star--and Facebook in the car. Drivers will be the ones to decide whether that earns a "like"--or a "dislike."

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