Mercedes-Benz Offering Cash, Incentives, and "VIP Discounts" to Compete With BMW

By Matthew Askari | November 01, 2012
In the battle for German-luxury-automaker-sales-supremacy, Mercedes-Benz and BMW are pulling out all the stops; According to a new Bloomberg report, in an effort to stay atop the luxury pack, Mercedes-Benz is letting some buyers skip as many as five payments, two more than a recent BMW offer of three. Mercedes is also offering discounts of up to $5,000 for "VIP customers," at the discretion of dealers.
Greg Goodwin, CEO of Kuni Automotive--which operates 14 dealerships along the West Coast and in Colorado--said it's not just about being number one. "What BMW and Mercedes also are dealing with is global competition and the ebbs and flows of global demand." Indeed, sales have lagged in Europe as the economic woes continue there. As a result, Both Mercedes-Benz and BMW are trying to increase deliveries in other large markets such as the U.S and Asia. One method is appealing to current customers with incentives to return. The practice has been around for years, but the German automakers are getting increasingly aggressive, and creative.
Both Mercedes and BMW have expanded sales to dealership fleets, which offer courtesy vehicle programs. The dealers often are given large discounts to buy cars for their fleets. The sales count towards overall sales figures, and often help to qualify them for sales incentives and bonuses from the automakers. It also allows customers that are getting service work done to borrow the fleet car until work on their own car has been completed. If nothing else, all this competition is good for luxury car buyers.
Source: Bloomberg