Mercedes Plays it Smart in Bid to Topple Lexus as Top Premium Brand in U.S.

According to one executive, Mercedes-Benz won’t offer incentives as it attempts to topple Toyota Motor Corporation’s Lexus division as the top-selling premium brand in the U.S.

Although Mercedes-Benz and BMW closed the gap in recent months, Lexus has retained the title as the top-selling luxury brand in the U.S. since 2000.

Last month, Lexus bolstered its sales by offering average customer discounts of $2,152.  That’s more than double the average incentive offered a year earlier. When asked whether or not Daimler AG’s premium brand has plans to increase its spiffs, Vice President of Mercedes-Benz Financial USA, Dietmar Exler, said “December is a big month” but added, “There will be nothing stupid just to be No. 1.”

Exler assumed his current role with Mercedes-Benz Financial USA last February, at the height of Toyota’s recall troubles. Since then, Mercedes-Benz’ U.S. sales have been helped by the introduction of a number of less expensive luxury models. According to Autodata Corporation, sales of the C-Class, with a sticker price of under $35,000, increased 15 percent through last month.

Exler said there is more pressure on automakers to cut costs on lower-priced models.

Mercedes increased its incentive spend by a modest 9.4 percent in October according to The company’s vice president of industry trends, Jesse Toprak, said the German automaker offered some aggressive lease deals on some models in October. One example, which he called “crazy”, was the $300 per month lease deal on the Mercedes C-Class sedan.

Mercedes-Benz is exploring a number of ways to reduce costs, including integration of consumer-friendly technologies like the Apple iPad. Last month the automaker launched a new system that allows consumers and dealers to use the iPad to access its point-of-sale database and execute transactions.  The new system is both quicker and more accurate than traditional methods.

Exler said the company’s finance arm is involved in the development of an extensive electronic contract system that he says could take years to complete.

In 2009, the automaker launched a new computerized contract validation system that he says has reduced the need for staff by more than 50 percent. During its first nine months of use, Exler said the new system identified 2,000 errors with contracts, which saved the company an average of about $1,000 apiece.

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