Business as usual for Mercedes-Benz

Launching a new range of luxury cars during the worst global depression since 1929 is a daunting task. But that is what Mercedes-Benz is doing today as it unveils the latest E-Class in showrooms across the Middle East.

The company has announced that year-on-year sale of Mercedes cars fell 23 per cent in the region in the first quarter of 2009. But despite this, one of the men responsible for making sure the new E-Class is a success remains upbeat.

"People are coming into the showroom and they are not window shopping, they want to buy a car," Frank Bernthaler, Director, Sales and Marketing, Mercedes-Benz Cars, Middle East and Levant, told Emirates Business in an exclusive interview. "Sales won't double from one month to another but there's a positive trend."

In March Abu Dhabi's Aabar Investments bought a 9.1 per cent stake in Mercedes-Benz's parent company, Daimler.


What are your hopes for the new E-Class in the UAE and the region?

Basically to follow the traditions of the E-Class and the success of it in terms of it being the segment leader, and when I talk about segment leadership I mean versus our main German competition, BMW and Audi. And to maintain at least our 50 per cent share of that market. We have been taking orders for six weeks and it looks very promising. We are confident the E-Class will give us an immediate boost.

But you don't want to give a number for advance orders?

No, not yet, but we'll definitely talk about it in May since that will be our first official month with the new E-Class.

Why don't you include Lexus when you talk about your market segment?

Obtaining good market data is very difficult in this region. We know the numbers we get from BMW and Audi are accurate because we exchange them on a headquarters level, but that doesn't happen with the Japanese manufacturer. We look at Lexus but when we talk about positioning we look at our main German competitors.

Are there any other new model launches due this year?

There's the facelifted S-Class, which we are going to see in October. There's a facelift on the GL and the launch of the E-Class will be followed by the E-Class Coupé and then towards the end of the year the E-Class Cabriolet. And we're going to launch the S400 Hybrid, which will be the first hybrid in our segment.

Mercedes cars have always been popular in the region, but in population terms it is a very small market compared with the US and Europe. How would you define the significance of this market?

Last year we sold 19,070 vehicles in the region and Levant. Put against 1.1 or 1.2 million sold worldwide that is low. But in terms of the S-Class, we are the number five region. We sold almost 7,000 S-Class last year and that is a huge number and that gives us an importance.

The auto industry has been badly affected by the global economic crisis. How would you sum up the impact on Mercedes in the region?

If you look at pure numbers, business is down. But I don't think we're losing sales, we're postponing them. I'm convinced that people who wanted to buy a Mercedes-Benz in January are holding off because of the situation – but they will come back.

Are you offering any discounts?

What we're definitely not doing is slashing prices by 20 per cent, 30 per cent. It would harm the brand, it would throw away 10 years of work here and be very harmful for the residuals and the used car business. That's a deadly spiral which is not worth doing. However, I think there's a certain degree of flexibility in the dealerships. When you say you are interested in this vehicle the negotiation starts, and I'm sure you find a deal. But this is on a one-on-one basis.

The president of another car company recently told Emirates Business that some rivals had a year's stock in the UAE. What is Mercedes-Benz's inventory position?

Fortunately we were never anywhere near a year's stock. We had higher stocks at the beginning of the year but in a month or two we will probably be back to a normal level, which for a US-produced model is three to four months and two to three months for a European model. We were at almost six months at one point.

Has the arrival of Aabar Investments as a major Daimler shareholder had any operational effects in the region?

Not yet, we have not had any formal feedback or indication of our role as the Middle East office with the new investors.


PROFILE: Frank Bernthaler Director, Sales and Marketing, Mercedes-Benz Cars, Middle East and Levant

Frank Bernthaler, 44, has wide-ranging experience with Mercedes-Benz in Mexico, the US and Germany as well as the Middle East.

He is German and grew up in Stuttgart, the hometown of Mercedes-Benz, and has worked for the company for 18 years.

He was previously Market Manager in the region and then worked for Mercedes-Benz General Distributors in South and Central America.

Before moving to Dubai in January 2008 he was Senior Manager, Marketing, for Chrysler, Jeep and Dodge at Daimler Central/Eastern Europe, Africa, Asia and Middle East. He is married with two children.

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