Mercedes Posts Best Monthly Sales Ever With 13% March Growth

Apr 04, 2014 8:53 am ET

(Updates with Romanian project in seventh paragraph.)

April 4 (Bloomberg) -- Mercedes-Benz, the world’s third- largest maker of luxury cars, sold more vehicles in a single month than ever before as demand surged for its new compact cars and the top-of-the-line S-Class.

Deliveries rose 13 percent in March to 158,523 cars and sport-utility vehicles, contributing to the best first quarter in the brand’s history, the division of Stuttgart, Germany-based Daimler AG said today in a statement. The stock rose to the highest in more than six years.

Sales growth at Mercedes has exceeded 10 percent for nine consecutive months as expanded lineups of compacts and the up- market E-Class won buyers. The carmaker and larger premium- segment competitors Bayerische Motoren Werke AG and Audi AG are posting gains as the European auto market recovers from a six- year slump, with industrywide U.K. deliveries in March at the highest for the month in a decade.

“Mercedes is growing at a brisk speed at the moment,” Frank Biller, a Stuttgart-based analyst at LBBW, said by phone. “This is a good basis to catch up with the competition. But I don’t expect BMW or Audi to post bad numbers for March either.”

Daimler rose as much as 1.7 percent to 71 euros, the highest intraday price since Dec. 11, 2007, and was trading up 1.6 percent at 2:49 p.m. in Frankfurt. The stock has gained 13 percent in 2014, valuing the carmaker at 75.9 billion euros ($104 billion).

Ranking Struggle

The release of 30 new models through 2020 is part of Daimler Chief Executive Officer Dieter Zetsche’s push for Mercedes to retake the lead in global premium-auto sales by then from Munich-based BMW and Ingolstadt, Germany-based Audi. Mercedes lost the top spot in luxury-car sales in 2005 to BMW, which is also introducing vehicles to fend off its two smaller challengers and is targeting 2 million deliveries for the first time this year.

Daimler has added production shifts, including a plan for more work hours starting in May at a Mercedes factory in Kecskemet, Hungary, to keep pace with sales growth. The company held a groundbreaking ceremony today for a 300 million-euro expansion of its plant in Sebes, Romania, to make a new nine- speed automatic transmission starting in 2016.

Zetsche said in February that the gains in demand will enable Mercedes to scale back sales incentives and raise some prices. Daimler is forecasting that operating profit from ongoing operations this year will “greatly exceed” the 7.9 billion euros reported in 2013.

Profitable ‘Tailwinds’

“The tailwinds from the new models should contribute to a relatively profitable next two years,” Frank Schwope, an analyst at Norddeutsche Landesbank in Hanover, Germany, said today in a research report.

Mercedes’s sales in Europe rose 7.6 percent last month, pushed by a 20 percent increase in the U.K. that outpaced the country’s auto-market gain of 18 percent. Industrywide U.K. car sales in March at 464,824 deliveries were the most for the month since a record set in March 2004, the country’s SMMT manufacturers’ association said today.

Demand at Mercedes in the U.S. increased 11 percent in March to 27,401 vehicles.

Mercedes’s Chinese deliveries surged 48 percent in the first three months of 2014, helped by the extended-wheelbase version of the E-Class. That compares with first-quarter Chinese sales gains reported today of 25 percent at BMW and 21 percent at Volkswagen AG’s Audi division. The two competitors are expected to publish global sales for March next week.

Compact SUV

Sales of compact Mercedes models, which include the A-Class hatchback and the van-like B-Class vehicle, jumped 26 percent in March to 43,349, helped by the introductions of the CLA coupe to the line last year and the GLA SUV last month. Sales of the S- Class doubled in the first quarter to 24,144 vehicles. A new version of the model went on sale in the second half of 2013.

“We are continuing the success story of the record year 2013 with additional new products,” Ola Kaellenius, head of Mercedes sales, said in the statement. “We expect added impetus from the new C-Class and the compact SUV GLA, which have been taking over the roads of Europe in the last few weeks.”