If Santa Claus is on television roaming a garage filled with shiny Mercedes-Benz cars and SUVs then Christmas must be just around the corner, right?
Not any longer. Just as retailers now try to gain an early edge with holiday shoppers through "pre-Black Friday" sales, Mercedes and archrival BMW couldn't even wait until daylight saving time ended to start their annual year-end sales promotions.
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BMW, currently the top-selling sales brand in the U.S., began advertising its Happier Holiday Event on Nov. 1 — before many had a chance to take down Halloween decorations.
Mercedes-Benz, nipping at BMW's heels for sales leadership, was on the same schedule. Mercedes dealers started their annual Winter Event on Nov. 1, and around the same time Santa popped up on TV, ushering trucks loaded with naughty and nice Mercedes vehicles out the door.
Though executives at both car companies downplay the significance of winning the luxury sales crown, IHS Automotive industry analyst Tom Libby says much is at stake with the outcome, including company pride, bragging rights for a year and lots of money. The early start on holiday sales reflects the intensity of the BMW-Mercedes rivalry.
"BMW and Mercedes compete directly against each other, and they don't want the other to get a step ahead. It's purely competitive, and there's also ego involved with the management teams of the companies," Libby said in a telephone interview.
"These two brands really mirror each other in their product portfolios. They follow each other in everything. Their volumes right now are very, very close, and they don't want to lose by 10 units, so they sell every unit they can in December. It's a particularly exaggerated situation for those two brands."
No matter which automaker wins that battle, consumers who can afford a luxury vehicle are the biggest beneficiaries of this bitter intramural rivalry between the two German brands, Libby said. Both are offering cut-rate leases, lower down payments and other discounts to sweeten their deals.
"This type of situation greatly benefits the consumer because with such pressure to sell vehicles that puts downward pressure on the actual price they will sell them for. Frankly, for a consumer who's considering a luxury vehicle, December is the best time to look," he said.
And it's not just BMW and Mercedes that are offering year-end deals on luxury vehicles. Lexus, currently third in luxury vehicle sales and out of the running for the top spot, is scheduled to launch its annual December to Remember promotion Monday, Nov. 24. Similar sales are in effect at other luxury brands or soon will be. Non-luxury brands aren't sitting out either, with sales from Chrysler already in full swing.
There's intense pressure on corporate sales executives and luxury dealerships "to hit the numbers from top management," Libby said.
"There are incentives for salespeople, (dealership) sales managers, for general managers, field people for manufacturers. There also are objectives for the month and the fourth quarter and objectives for the year, and they all come together on Dec. 31, so there's a huge amount of pressure that comes down through the hierarchy of these manufacturers to hit the numbers," Libby said.
The result is typically a spike in luxury vehicle sales in the fourth quarter and especially in December, which in prior years was traditionally one of the slower sales months because consumers were focused on holiday gift buying.
Though BMW holds what would seem to be a comfortable sales lead over Mercedes as the two head into the home stretch, Libby said he expects both companies will turn up the heat in December because neither wants to lose.
"It's very, very close, and it's not over. Each one has some things in its favor," he said. "We expect it go right down to the wire."
Libby also expects that 2015 will become a three-way race for the luxury sales crown because Lexus, which has had 13 consecutive months of higher sales, is poised to make bigger gains with its newest entry, the NX compact crossover SUV.
The NX is in "the hottest segment in the luxury market," he said, and competes with compact crossovers such as the BMW X3, Mercedes GLK-Class and Audi Q5.
"That will help them tremendously. They know that next year, with the NX, they will be right in there."
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