Business News

Mercedes Benz takes aims at luxury rivals as sales hit record

Apr 4, 2012, 12:38 GMT

Berlin - The chief executive of German carmaker Daimler said Wednesday the German carmaker had more work ahead as its flagship Mercedes-Benz brand battled to overtake luxury rivals BMW and Audi.

'Our company is on the way to its best form, but is not there yet,' Dieter Zetsche told about 6,000 shareholders attending the company's annual meeting in Berlin. 'We are confident that we can do more, and that also applies to the share price.'

Daimler's flagship Mercedes-Benz brand reached a record high in the first quarter of the year, with sales in the three months to March rising by 12 per cent - to more than 340,000 - compared with the same period last year.

The Mercedes-Benz figures added to signs that German carmakers have had a strong start to the year, with new sales figures also released Wednesday by BMW and Audi.

The rise in Mercedes-Benz cars reflected strong demand for the brand's C-Class model, as well as its S-Class and SUV models, Daimler said.

Also reflecting the group's strong start to the year, truck and van sales jumped by more than 20 per cent in the quarter.

Sales of Daimler buses, however, came in 5,000 lower in the first quarter, compared with last year.

But in the race to be the world's leading premium car brand, Mercedes remains behind BMW and Audi.

However, Zetsche told shareholders: 'Whatever we start, we want to be out in front - on a long-term basis. Where we are not number one, we want to be there.'

Shareholder critics at the meeting lashed out at the Daimler board, complaining that Mercedes' rivals had overtaken the brand - identifiable by the star on its hood - in terms of innovation, measures to reduce pollutions and profitability.

'The star has faded in the shadows of its competitors,' said fund manager Ingo Speich from Union Investment.

He said the last 10 years had been a lost decade for the group and he was not confident that the management could begin a new era.

Daimler expects global car markets to grow by 4 per cent this year. 'At Mercedes, we're on a roll, but we want to beat that,' said Zetsche, who confirmed the company expects Mercedes-Benz car sales this year to top the record it set in 2011.

The 58-year-old Zetsche's contract comes up for renewal next year.

Along with Audi and BMW, Mercedes has been enjoying strong sales, partly as a result of the luxury car boom underway in China and the US - the world's two biggest car markets.

The Daimler annual general meeting coincided with the release of first-quarter figures from BMW and Audi.

Audi said first quarter sales in China and Hong Kong surged by 40 per cent to hit a record 90,063, compared with the same period last year. Audi is the luxury offshoot of Europe's biggest carmaker, Volkswagen.

Meanwhile, BMW said its total global sales hit a record of more than 400,000 between January and March.

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