Geneva Motor Showdown: Mercedes-Benz, CLA Pick A Fight With Audi, BMW Page 2

March 8, 2013

CLA: small is big around the world

Daimler AG CEO Dieter Zetsche, 2013 Geneva Motor Show

Daimler AG CEO Dieter Zetsche, 2013 Geneva Motor Show

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Geneva hosted the worldwide debut of the 2014 Mercedes-Benz CLA, the first compact car from a new family that will be sold in the U.S. It's a critical car for Mercedes' global fortunes. While BMW and Audi have had success with smaller vehicles, Mercedes' Smart brand has struggled for relevance and product. It's almost the opposite case in the U.S., however. BMW's 1-Series cars have been overshadowed by the 3-Series and MINI. Audi's A3 hatchback lacks a sedan counterpart, though one is due to arrive next year. The CLA will be on sale in a matter of months, while BMW will have its attention occupied with the global launch of its i3 green car, and Audi, with its new intra-corporate rivals for attention at Porsche.

Zetsche sees the 2014 CLA as a major opportunity for Mercedes to expand sales around the world, and to draw in new and young buyers, in a way the automaker hasn't been able to since the original C-Class.

It is "necessary and possible to position, specifically in the U.S., these products in a segment where Mercedes becomes affordable for more customers than ever before," he says. 

At the same time, Zetsche acknowledges that the CLA and other coming compact vehicles blur the line between Mercedes' longtime luxury-brand position with the grey area of "premium." In America, for example, the CLA will compete against the likes of the Buick Verano and Acura ILX.

It's "not black and white," Zetsche says, trying to identify the breakover point. It "probably will be difficult to have a scientific separation between premium and luxury."

And while it's aimed specifically at attracting younger buyers to the brand, it's fine if the CLA also brings along some of the current clientele.

"The more mature, young at heart customers of ours...they're good to us, they're affluent, they're the best customers you can have," Zetsche says. "Obviously their numbers are limited. That's why its important, if you want to grow, that you go to other segments as well."

Zetsche says the company only has some hints that the strategy could work--and could expand Mercedes' reach to the audiences BMW and Audi now serve. In Europe, the compact car lineup, including the A-Class and B-Class, has an average age 10 years younger than other Mercedes products. In the U.S., he adds, "we see reactions to the blogs, to the ads since the Super Bowl...All the signs so far are very promising."

No matter to whom the CLA sells, it's designed to make a profit, Zetsche confirms.

"We are not a welfare organization," he says, noting that the compact-car family of vehicles share more than 70 percent of their structure and parts, in an effort to manage costs and complexity.

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