November 2015 Sales
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Mercedes-Benz slipped further behind rival BMW in U.S. sales in November, but U.S. brand chief Steve Cannon says he won't pump up planned incentives in December to win the luxury-sales race.
BMW currently leads the luxury race, with just over 8,000 units separating it from a hard-charging No. 3 Lexus.
"Our competitors are out there very aggressive," said Cannon, CEO of Mercedes-Benz USA. "Look, we're going to have another record year -- we're not going to go crazy to try to buy a sales crown. If somebody wants to push harder, let them go for it."
Mercedes has a strong year-end advertising budget, plus deals on volume models that are "about as attractive as we make them throughout the year," Cannon said.
Mercedes will need all that to make up for a crummy November, when the brand fell further behind BMW on a Mercedes-Benz luxury sales decline of 13 percent.
As a result, December began with BMW leading the luxury segment with 11-month sales of 311,398 vehicles, up 4.4 percent, followed by Mercedes-Benz with 308,885, up 4.2 percent and Lexus with 303,221, up 12 percent. The Mercedes-Benz tally excludes sales of the Sprinter commercial truck.
BMW won the U.S. luxury-sales crown in 2011, 2012 and 2014. Mercedes-Benz took it in 2013. Lexus had held it in 2000-10.
The November plunge was Mercedes' steepest monthly decline since July 2009.
Cannon attributed the slide to a shortage of vehicles in the hot compact crossover segment. The redesigned and renamed GLC went on sale Nov. 25, later than expected. The vehicle it replaced, the GLK, had "pretty much sold through," he said, leaving "the gap we fell into in the month of November."
The GLC is now out in the market in volume for December sales, he said.
Dealers also have complained about short supplies for the GLE, which went on sale in August, replacing the M-class midsize crossover. Cannon acknowledged that GLE inventory is "tight" because demand has been robust. He wouldn't provide specific supply data for the GLE but said production availability will be strong next year.
According to Automotive News Data Center estimates, Mercedes had a 42-day supply of light trucks on Dec. 1, up from 32 days on Nov. 1.
For the first 11 months of 2015, Mercedes-Benz's incentive spending rose 19 percent, according to TrueCar. But November spending dropped 6 percent, apparently reflecting a lack of vehicles that could take advantage of incentives.
Enough incentives?
Some Mercedes-Benz dealers have grumbled that promotions for the brand's year-end Winter Event aren't competitive enough. Dealers "say stuff like that," Cannon said, but he stressed that this year's Winter Event programs are on par with 2014's.
Other dealers say promotion levels make sense given the brand's limited truck inventory.
"Mercedes hasn't been as aggressive because of their supply problems," said Frank Allocca, a Mercedes-Benz dealer in Newton, N.J., referring to the GLC and GLE shortages. "I can't hate them for that. They're in business to make money."
Allocca said his dealership has been able to hold better gross profits on those vehicles because of the short supply. "You won't have to do a bake sale for any Mercedes-Benz dealer," he said.
Jeff Aiosa, a Mercedes-Benz dealer in New London, Conn., wants more crossovers; his store has less than a week's supply of the GLE.
"We [dealers] always want more program support, but I think it's good," Aiosa said. "There's no excuse for us not to have a really good finish."
But can the brand catch up to BMW?
"There's a shot, and if it happens, it happens," Cannon said. "But we're not altering our programs for the month in order to do that."
Lexus executives also have said they won't chase the crown with aggressive incentives. But Lexus clearly is seeking sales gains, and brand General Manager Jeff Bracken has said that he's keen to see Lexus back on top. Lexus's annual "December to Remember" promotion is its biggest marketing drive of the year.
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