If Mercedes Can Sell SUVs, What's Wrong With The Big Three?

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Mercedes-Benz, the luxury division of DaimlerChrysler, had a unit sales increase of 6.5% to 1.15 million. The reason for the increase was a 86% increase in sale of its big off-road and luxury-van M, R, G, and GL brands. Sales of many of its sedans fell during the year.

That’s insane. In Detroit, sales of SUVs are one of the primary causes for falling US share of the Big Three. It’s tough to reconcile the Mercedes numbers with that.

There are a couple of potential reasons. First, the Mercedes vehicles are more expensive that US counterparts. Perhaps the wealthy do not care about gas prices. But, many rich people are cheap. The parking lots of Costcos are filled with luxury cars.

Another reason might be that the Mercedes SUVs are viewed as better built, but JD Powers results do not put Mercedes quality well ahead of its US counterparts.

Perhaps Ford, GM, and the Chryler unit of DaimlerChrysler can learn something from Mercedes. SUV sales are not down across the board, and there has to be a reason.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.