Automotive News - November 10, 2008 - (Page 4) 4 • NOVEMBER 10, 2008 Mercedes hit hard in Northeast, once a sales stronghold Diana T. Kurylko dkurylko@crain.com More for Mercedes Mercedes-Benz additions in 2009 All-new GLK compact crossover in January Redesigned E-class sedan and new coupe in mid-2009 S-class hybrid in September ML crossover hybrid in September Face-lift for S class next fall the volume.” Mercedes held its own through September, with U.S. sales down only 1.7 percent for the first nine months compared with a year earlier. That changed in October when Mercedes M-B: No sales record this year ➤ 16 sales fell 34.3 percent, putting yearto-date sales down 5.3 percent. Mercedes executives have said the brand won’t set a sales record this year, breaking a string of 14 consecutive years of growth. The latest record was 253,277 in 2007. Despite the gloom, Lieb sees growth in 2009 because of some key new products: The all-new GLK compact SUV in January. A redesigned E-class sedan and allnew coupe in mid-2009. The S-class hybrid in September. An ML crossover hybrid in September. MONTVALE, N.J. — With the collapse of sales in the Northeast because of the Wall Street meltdown and credit crunch, Mercedes-Benz is finally feeling the pinch, says its chief U.S. executive. “The Northeast is where we were compensating for the losses and still showing reasonable numbers,” says Ernst Lieb, Mercedes-Benz USA CEO. “But now the Northeast is not doing well. “All of us in the luxury segment were relying on the Northeast for the first nine months. Florida is down, California is down and the central area is stable, but it doesn’t give you A face-lift for the S class in fall 2009. Lieb has particularly high hopes for the GLK because of consumers wanting smaller vehicles and concern about fuel economy. And the new 50-state diesel Bluetec versions of the GL SUV and ML and R-class crossovers went on sale last month. It’s too early to gauge sales, but dealers are encouraged, says Lieb. This month, Mercedes-Benz holds its annual dealer meeting in Arizona, where Lieb will stress that “these products will help us get through the hard times.” Turning up the incentives isn’t the answer because “there is no traffic, and the old tricks don’t necessarily work right now,” says Lieb. “We will continue the direction we have taken because all indications are good.” Lieb says that on the quality side, Consumer Reports confirmed that quality and consumer perceptions of Mercedes are improving — a trend seen in J.D. Power and Associates and internal studies. “Our internal statistics show we are ahead of what the surveys show,” says Lieb. To further boost quality, Mercedes has contracted with J.D. Power to mystery-shop every dealership twice a year. There are “no penalties or money attached,” but Lieb wants every dealer to look at the results. c BMW boosts dealers’ year-end ad money Arlena Sawyers asawyers@crain.com As BMW dealers prepare for their year-end sales event, they are getting more factory money to advertise new and certified-used vehicles. Through the end of the year, BMW of North America LLC is paying dealers 75 cents — up from 50 cents — for every dollar they spend to advertise on TV and radio, in newspapers and through direct mail. The money does not cover online ad spending. In the first half of 2008, BMW and its dealers spent $133.9 million to advertise in U.S. media — down 23.3 percent from the year-ago period, according to TNS Media Intelligence. Bill Bates, BMW division’s used-vehicle manager, said the co-op promotion aims to help dealers tell consumers “what great deals we have.” About 140,000 BMW cars and trucks are coming off lease this year in the United States — a company record, Bates said. At least half will be sold as certified used vehicles, he said. As BMW relies less on leasing, the company will have fewer end-oflease vehicles available for certification starting in 2009, Bates said. In September, leases accounted for 54.1 percent of BMW’s U.S. new-vehicle sales, down from 67.6 percent in September 2007, according to J.D. Power and Associates. Through October, BMW division sold 215,836 new vehicles in the United States, 10.0 percent fewer than in the first 10 months of 2007. In the same period, BMW sold 85,081 certified used cars and trucks, up 17.4 percent from the year-ago period. “We’re on track to break 100,000 units this year,” Bates told Automotive News. “It’ll be the first time we’ve ever done that.” Alan Graham, general manager of Erhard BMW in suburban Detroit, says he is putting the added factory ad money to good use. Last month, Graham says, he boosted his budget to advertise certified vehicles by 25 to 30 percent over the previous month — to about $22,000. He says certified sales rose more that 40 percent to 32 vehicles. c This artist’s rendering depicts Mercedes’ future $220 million New York store, part of a multiuse development at 53rd Street and 11th Avenue in Manhattan. Mercedes’ $220 million flagship N.Y. store will be showcase for brand’s design mandate Diana T. Kurylko dkurylko@crain.com M-B loves NY Mercedes-Benz Manhattan builds new company dealership Where: 53rd Street at 11th Avenue Opening: Early 2011 How big: 330,000 square feet Cost: $220 million Expected volume: More than 2,500 new cars annually Advantages: Moves site from current location by congested Lincoln Tunnel; more entrances for service customers; better location near competition “From a customer point of view, the location is a nightmare,” says Lieb. The new store will conform to the Autohaus dealership design to which Mercedes-Benz says all dealers must upgrade. Dealers who upgrade get a bonus of $400 per new car for three years. Lieb says Mercedes had to set an example for its dealers, rather than MONTVALE, N.J. — Using the new design standard that its dealers must meet, Mercedes-Benz USA is building a $220 million, 330,000-squarefoot flagship dealership in Manhattan. The store, scheduled to open in early 2011, will replace a current company-owned store. It will give Mercedes a better location, near competitors and away from traffic jams at the current site near the Lincoln Tunnel, says Ernst Lieb, CEO of Mercedes-Benz USA. The new store will sell MercedesBenz, Maybach and Smart vehicles. The current store doesn’t sell Maybach. At Mercedes’ current store — the only dealership the brand owns in the United States — heavy traffic creates long delays for customers bringing in vehicles for service. Ernst Lieb: “We are putting our money where our mouth is.” staying in the aging store it leased starting in 1969 and then bought in 1981. “We are offering dealers incentives for investment in a three-year program, and we’ve been asked many times ‘What are you doing about your own store?’ We are putting our money where our mouth is,” says Lieb. “We have to play by the same rules we are applying to our dealers.” The new store will be larger than the current dealership, which sold 2,652 new cars last year, making it the fifth-largest Mercedes-Benz retailer by volume. Through October, the store sold 2,482 new vehicles, up 15.3 percent. The new store will have a service area two to three times the normal size for the brand, says Lieb.The store will be 10,000 square feet bigger than the current store. It will be the 33rdlargest of Mercedes’ 340 U.S. dealerships. The Mercedes store will be part of a mixed-use development that will include about 900 apartments above the showroom and in an adjoining tower. The developer, Two Trees Management of Brooklyn, N.Y., will construct the building, and Mercedes will own its portion and a share in the apartments. Lieb says that Mercedes chose the mixed use site because “having a building in Manhattan and not using the air rights is not financially viable.” Lieb says Mercedes will sell its current Manhattan store and land. Mercedes projects that proceeds will reduce the net cost of the new project to between $30 million and $35 million. The site of the new dealership was a parking lot. c
Table of Contents Feed for the Digital Edition of Automotive News - November 10, 2008 Life at 11 million: Slash, rethink The options: Bailout or disaster Can Toyota reheat the frozen Tundra? Chrysler dealers cheer halt to merger talk VW will unveil roadster at Detroit auto show BMW boosts dealers' year-end ad money Mercedes' $220 million flagship Mercedes hit hard in Northeast, once a sales stronghold Mercedes will kill CLK, add larger coupe, convertible Mitsubishi reclaims its finance business Toyota's Esmond to speak at congress Loss is more: Europe snatches bigger share of U.S. market Cash burn rates threaten GM, Ford GMAC: We're nobody's captive As losses mount, suppliers risk cash-flow crunch Tata: Yes to Jaguar XF derivative, no to SUV U.S. aid is needed now, but not to help Cerberus They are too big to fail Why should we help GM and Chrysler? First and foremost, you must be flexible U.S. trade policy gives it all away To the Editor: A rough ride is nothing new for autos Dealer's politics were pertinent Chrysler's 1st electric: Probably a cargo van Auto meltdown forces Mercedes to scrap prediction of sales record Boosting mpg will bump up stickers, too Adding up the tab for fuel economy Camaro Black: Eye-catching, affordable and available Honda sees green in Civic HFP's street performance Honda offers peek at future Fit Ford F-150 Raptor flies off-road Souped-up, tricked-out â and headed for the showroom Report: Toyota plans $5,000 car Amid gloom, Mazda chief sees revival in 2009-10 Report: Past-due subprime loans jump Toyota aims to win loyalty with credit card Study: Car buyers turn green for different reasons Thanks, buddy Hyundai helps Dealers Metaldyne offers pennies to bondholders Obituaries Personnel As expected, Oct. sales sank Another Chinese automaker plans Mexico factory Honda backs off U.S. clean diesels Industry pal, foe vie for key post in Congress Industry expects more activism from D.C. N.A. output falls 19.9% Toyota moves in striking distance of GM's U.S. sales crown Going, going . . . An ex-GM exec's view: It's going to get nasty Sex, Nazis, chicken and BMW: A scandal that puts fiction writers to shame Recession rips up roadster market Toyota takes heat for 'the herpes of the advertising world' Want to boost mpg? Turn up the heat on AC Cutting energy loss: A nibble here, a nibble there ... Carbon slashes weight, but it's still too pricey Carmakers shift to gears in search of mpg gains Natural gas draws interest as alternative fuel Friction? Ay, there's the rub Electric for a week Automotive News - November 10, 2008 Automotive News - November 10, 2008 - (Page Intro) Automotive News - November 10, 2008 - (Page Bellyband1) Automotive News - November 10, 2008 - (Page Bellyband2) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 1) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 2) Automotive News - November 10, 2008 - VW will unveil roadster at Detroit auto show (Page 3) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 4) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 5) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 6) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 7) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 8) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 9) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 10) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 11) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 12) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 13) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 14) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 15) Automotive News - November 10, 2008 - Auto meltdown forces Mercedes to scrap prediction of sales record (Page 16) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 17) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 18) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 19) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 20) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 21) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22a) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22b) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22c) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22d) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22e) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22f) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22g) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22h) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22i) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22j) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22k) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22l) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 23) Automotive News - November 10, 2008 - Souped-up, tricked-out â and headed for the showroom (Page 24) Automotive News - November 10, 2008 - Amid gloom, Mazda chief sees revival in 2009-10 (Page 25) Automotive News - November 10, 2008 - Toyota aims to win loyalty with credit card (Page 26) Automotive News - November 10, 2008 - Hyundai helps (Page 27) Automotive News - November 10, 2008 - Dealers (Page 28) Automotive News - November 10, 2008 - Personnel (Page 29) Automotive News - November 10, 2008 - Personnel (Page 30) Automotive News - November 10, 2008 - Personnel (Page 31) Automotive News - November 10, 2008 - Personnel (Page 32) Automotive News - November 10, 2008 - Personnel (Page 33) Automotive News - November 10, 2008 - Personnel (Page 34) Automotive News - November 10, 2008 - Personnel (Page 35) Automotive News - November 10, 2008 - Personnel (Page 36) Automotive News - November 10, 2008 - As expected, Oct. sales sank (Page 37) Automotive News - November 10, 2008 - Honda backs off U.S. clean diesels (Page 38) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 39) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 40) Automotive News - November 10, 2008 - N.A. output falls 19.9% (Page 41) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 42) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 43) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 44)
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