How far can you stretch the notion of ‘premium’?
That was a question posed to us this week by Thomas Weber, member of the Board of Management of Daimler AG, who reiterated this week the company’s reluctance to produce a car smaller than the A-Class, namely a rival for the Audi A1.
But while Weber claims that this move “changed the game completely for Mercedes but also the competitive environment” by yielding a conquest rate of up to 80.0 per cent (largely from non-premium brands), the drive to go smaller simply isn’t there.
“We clearly stated B-segment is not important for us, yes there is demand but is it profitable for us? I think no,” he said. “Maybe if you only focus on volume, but profitability-wise it’s not so important.”
Of course, Mercedes does play in this market through its Smart subsidiary brand, which makes the ForTwo and ForFour (albeit, no longer for Australia). The latter of this pair grew in the move to a new generation, and Weber said this was sufficient B-segment coverage for Daimler.
“Smart two and four-seater, if you look to four seater the gap is now closed,” he said.
“Also it’s true, how far can you stretch premium? The B-segment, it’s not so easy to convince customers that’s still premium, no?”
Mercedes’ decision to lean on Smart mirrors BMW’s decision at present to cover the small end of the market with its MINI brand only, though those two brands share a common architecture called the ‘UKL’.
Only Audi offers an A/B-segment car, the A1 that shares much with the Volkswagen Polo, and which this year is its fifth top-selling model line in Australia.
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