Geneva Motor Showdown: Mercedes-Benz, CLA Pick A Fight With Audi, BMW

March 8, 2013

Geneva is a peaceful town, and the annual auto show marks a detente--usually--for the world's carmakers. McLarens park next to Bentleys and leave room to spare. Space is made for one-off tuner fantasies. Even rival execs rub shoulders and shake hands as they get a glimpse of the latest supercars and profit-makers alike.

It's all good, except when the gloves come off, as evidenced this year in the backhands lobbed between the Mercedes, BMW, and VW Group stands, kept at arm's length at the Geneva Palexpo.

The backstory: the battle for luxury car dominance is heated, with BMW ending 2012 at 1.86 million units worldwide. VW's Audi brand surged to 1.46 million units in global sales, while Mercedes-Benz parent Daimler finished the year at 1.42 million units. All are faced with a sluggish economy not just in Europe, but in the U.S. and even in China, the three biggest luxury-car markets in the world.

In the U.S., each brand ended last year on a high note, with the photo-finish between BMW and Mercedes setting the stage for some subtle Geneva digs. BMW sales surged December, surpassing Mercedes, which had led 11 months out of the year--but Mercedes says it saw more registrations, concluding that BMW had pressured dealers to acquire more vehicles without moving them on to retail customers.

"In the majority of markets, Mercedes continues to be perceived as the number-one luxury brand," said Daimler AG chairman Dieter Zetsche, who in an interview at this week's Geneva Motor Show indicated the year-end sales jockeying wasn't entirely unexpected.

"I told our guys over there definitely to stay course in December, not to do anything unusual," Zetsche said. "If substantially we pass the others or one other, that's great. If not, fine."

Zetsche, 59, who recently signed up for three more years as the company's chairman, was himself the source of some speculation at the show. The extension of his contract for three years, rather than the customary five years, had some rumoring discontent within the board of management over Mercedes' small-car strategy, while others noted that Zetsche is nearing retirement age, with a potential replacement in Wolfgang Bernhard waiting in the wings.

Zetsche has been chairman of Daimler since 2006, the final days of DaimlerChrysler. Bernhard served with Zetsche at DaimlerChrysler before returning to Germany, where recently he was appointed head of Daimler's truck division, switching roles with Andreas Renschler, who ran Mercedes' SUV plant in the U.S. and Smart before heading up its trucks division. Renschler will now take over Bernhard's role in purchasing, the company said in a release.

The tension between Germany's Big Three surfaced again at a pre-show event, when Mercedes' Dr. Thomas Weber indirectly compared its new SLS AMG Electric Drive to Audi's stillborn R8 e-tron, calling it "real Vorsprung durch Technik." The play on Audi's corporate slogan drew murmurs from the crowd of media and executives on hand for the global unveiling of the A45 AMG.

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