FRANKFURT -- Global sales at DaimlerChrysler's Mercedes Car Group fell 9.4 percent in July to 98,100 units, the carmaker said on Thursday, led by a drop in its flagship Mercedes-Benz marque.
Turnover of Mercedes brand vehicles declined 12.3 percent versus the year-earlier month, it said, citing one fewer work day, the impact of worker demonstrations over planned cuts in labor costs, and retooling for its new A-class model.
Divisional sales fell 4.3 percent in the first seven months of 2004 to 682,900 units, the German group added, but said it still expected full-year sales to rise, helped by the relaunch of its revamped A-class small car in September.
"We are still on course for the full year with the current sales figures for all Mercedes-Benz model series," Joachim Schmidt, the division's head of sales and marketing, said in a statement.
More than 35,000 customers had already placed orders for the new A-class car that hits the market in September, the company said, meaning it was more than two-thirds of the way towards reaching its 2004 sales target of 50,000 units.
BMW SPEEDS AHEAD
The figures came a day after arch-rival BMW forecast July group sales rising four to five percent, led by a seven percent gain in its hallmark BMW luxury brand.
Metzler Bank analyst Juergen Pieper called the Mercedes sales numbers a letdown.
"There are some signs that the market position of Mercedes keeps weakening and this is something you have to watch. Although expectations were not that high this year for Mercedes, it still seems to be disappointing," he said.
The company will have a real problem meeting its targets if the A-class rollout is not a success, Pieper added.
The Mercedes group includes Mercedes-Benz, the Smart range of compact vehicles and its super-luxury Maybach limousine. The division's global sales had risen in June for the first year-on-year gain since December.
Sales of the tiny Smart cars rose 14.5 percent to 13,600 last month, helping take up some of the slack from the Mercedes-Benz line, where sales came in at 84,500 units in July.
DaimlerChrysler hopes the relaunch of Mercedes-Benz C-Class sedans, SLK roadsters and the new Smart ForFour compact -- the brand's largest car to date -- will help spur performance later this year at its most lucrative business, which last week abandoned its target of matching 2003 earnings this year.
A changed model mix, the cost of new launches, adverse currency influences and stepped-up spending to fix quality problems that have tarnished its image will make profits drop.
DaimlerChrysler, the world's fifth-biggest carmaker, aims to improve overall sales at the division this year thanks to the Smart brand, while Mercedes-Benz aims to match 2003 sales levels during a year of transition to newer models.