FRANKFURT - A year has passed since a Swedish auto writer flipped the Mercedes-Benz A class during a 'moose test' maneuver. The incident damaged the image of Daimler-Benz and almost killed its new baby model.
But the A class appears to have survived the scare, thanks to a rescue plan put in place by Juergen Schrempp, co-chairman of DaimlerChrysler AG.
At first, Daimler retrofitted the car with an electronic stabilizing program and replaced the tires. Then Schrempp decided to take the radical step of suspending sales, which had started in October 1997, and re-engineering the car.
The strategy worked. Worldwide, only 4,000 customers canceled orders. The car was relaunched in February.
Ten months later there are some reports of disappointing sales in Germany. But Dieter Zetsche, head of sales and marketing for Mercedes-Benz passenger cars, said the model has not underperformed.
'The A class has fully met our expectations - in terms of sales, target customers and conquering a new market segment,' he said. 'Eighty-one percent of A-class buyers are new to Mercedes-Benz. Thirty-six percent are female, compared with an average 10 percent on other models. We are also attracting younger customers.'
RURAL SALES SLOW
While demand in urban areas has been strong, sales reportedly are slower in the countryside.
In Germany, some rural dealers overestimated the popularity of the A class and have been left with unsold vehicles. Those dealers say they have started to add incentives to attract buyers.
DaimlerChrysler says it is a distribution problem, not one of oversupply. Dealer allocations have been revised, and cars are being redirected into areas with higher sales potential.
A-class sales will reach around 150,000 this year worldwide, said DaimlerChrysler. At the end of October, they stood at 115,000.
Since the A-class relaunch, more than 67,000 units have been sold in Germany. This includes 6,000 rental cars. Sales in most other European countries began in March; the United Kingdom started receiving right-hand-drive deliveries in September. DaimlerChrysler has sold 10,000 A-class units in Italy; followed by 8,500 in France; 2,700 in Switzerland; 2,500 in Austria; and 2,200 in Spain.
But dealers have become frustrated by the lack of a full model range. A common-rail diesel engine, expected last spring, has only just been introduced.
Buyers wanting a model with an automatic transmission, 1.9-liter gasoline engine or an AMG version will have to wait until spring 1999.
Some industry analysts expect a change in the Mercedes-Benz brand strategy as a result of the Daimler-Chrysler merger. Rolls-Royce and Bentley - under BMW and Volkswagen control - are expected to become tougher competitors. Mercedes-Benz will have to focus on its role as a premium car brand rather than stretch into segments below the C class.
Some analysts say neither the A class nor the planned hatchback C class fits into such a strategy. The A class, they suggest, would be a perfect match for the Chrysler model range.
'I expect an internal decision within the next two years to build the A-class successor under the Chrysler label,' said Carsten Risch of PricewaterhouseCoopers Berlin. 'Then Mercedes-Benz still has three more years to launch a campaign to gently lead former A-class customers into the Chrysler showrooms, by stressing the fact that it is all one big company.'
But Zetsche insists there will be an A-class successor and 'it will be a Mercedes-Benz.'