Exchange rate pressures – and the economic reality of supply and demand – have prompted Mercedes-Benz to increase prices for the second time in nine months across some of its most popular models.
The latest price lists have revealed Mercedes-Benz has increased the RRP of most A-Class hatch and sedan, C-Class sedan, wagon, coupe and cabriolet models, as well as certain variants of the GLC SUV.
Compared to the RRPs from the beginning of the year, the price rises range from 2.8 per cent to 8.2 per cent – or from $1800 to $8500 – which would tend to indicate supply and demand are key factors, rather than currency pressure alone, which has received most of the blame.
Some of the price rises have coincided with spec or tech changes, though these have been relatively minor.
Mercedes sales so far this year are down by 9.8 per cent in a market that has slowed by 18.8 per cent over the first 10 months of 2020 compared to the same period last year.
However, Mercedes dealers says they could sell more cars if they could get more stock. Interruptions to production during the coronavirus crisis – combined with unexpected demand – have in many cases left showrooms with a limited selection of models.
As CarAdvice reported earlier this year, one dealer said buyers were “upgrading from a Mazda to a Mercedes” rather than taking an overseas holiday.
“With international travel very much under a cloud, people are treating themselves (in other ways), whether it’s a new car, a kitchen or a home renovation,” said a luxury-car dealer contacted by CarAdvice.
When asked why prices had risen twice in nine months on some of its most popular models, a statement from Mercedes-Benz Australia said: “Although we can’t comment in detail about how vehicle pricing is determined, we can confirm price increases have been made to adjust for various changes including exchange rate instability. Pricing and specification of each vehicle variant is adjusted individually and affected by different factors.”
Mainstream and luxury car brands have benefited from the federal government’s instant asset write-off for business buyers, with stronger than expected demand for new motor vehicles.
After half a decade of sharp discounts, slim profit margins, and an over-supply of vehicles, car dealers are now making bank as they no longer need to discount as heavily, if at all.
Record low interest rates have blunted some of the price increases, say dealers.
“A lot of people just look at the repayments and not so much at the cost of the car,” said another major metropolitan dealer. “They justify the purchase on what it costs them per week.”
Industry analysts believe new-car prices will remain high for the foreseeable future and don’t expect sharp discounting to re-emerge until early 2021, as dealers clear the previous year’s stock and mainstream brands have a big push in the lead-up to the end of the Japanese financial year in March.
Examples of Mercedes-Benz prices rises so far this year (all prices need to have on-road costs added):
Mercedes-Benz A180 hatch:
January 2020: $42,900
February to September 2020: $43,900
October 2020 onwards: $45,100
Mercedes-Benz C200 sedan:
January 2020: $64,500
February to September 2020: $65,800
October 2020 onwards: $66,300
Mercedes-Benz C300 cabriolet:
January 2020: $103,740
February to September 2020: $105,835
October 2020 onwards: $112,300
Mercedes-Benz GLC300 SUV:
January 2020: $77,700
February to September 2020: $79,335
October 2020 onwards: $81,500
MORE: Everything Mercedes-Benz