The Middle Class - a comparison of the Chrysler Sebring/Dodge Stratus and the Mercedes-Benz C-Class and related information - Statistical Data Included

Automotive Industries, July, 2000 by Dale Jewett

2002 -- Designio, high-performance AMG versions introduced

2002 -- 4-Matic model

2002 or later -- Station wagon introduced, hatchback possible SLK and CLK move to new platform

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As the board of management member in charge of Mercedes-Benz and Smart cars, Juergen Hubbert has presided over Mercedes' product renaissance for the past decade. Hubbert, 60, expects sales of the new Mercedes C-Class to rise at least 10 percent over the previous model.

We spoke with him recently in Germany.

Q: With the new C-Class seeking to expand its buyer base, and the Chrysler Sebring being positioned more upscale, is there a danger of the two competing against each other in the market?

Hubbert: Absolutely not. There is no overlap between Chrysler and Mercedes.

Q: Did the Chrysler side of the company offer any expertise that helped with the C-Class development?

A: No. The project had been completed.

Q: What improvements did you make to the manufacturing process to cut costs?

A: The development of the C-Class has been the pilot run for our technical center in Sindelfingen, where we have grouped all of the project areas under one roof. It helped us develop the car in less than four years with a $600 million development budget. We also spent $640 million on our production facilities in Sindelfingen and Bremen. It is less costly to build the car by a double-digit percentage (versus its predecessor).

-- DJ

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Last year Mercedes sold more than 350,000 copies of the C-Class variants, 35 percent of its worldwide car sales.

But in the U.S., the C-Class has perpetually been overshadowed by the E-Class and lately, the M-Class SUV. Last year the C-Class accounted for 15 percent of Mercedes' U.S. sales and was handily outsold by the BMW 3-Series and Lexus ES 300.

Since the entry-level luxury segment accounts for 70 percent of all luxury vehicle sales, the new, larger C-Class is designed to be a much stronger competitor, says Paul Halata, president of Mercedes-Benz USA, Inc. He predicts that the new car will raise C-Class volume to 35,000 to 40,000 units a year, up from 29,000 units in 1999.

A key component in that strategy is attracting a younger, wealthier buyer, explains Karen Makris, product manager for the C-Class. "Our goal is to reach out to new owners with a sporty, fun-to-drive car, while staying true to our traditional buyers."Prime targets include more females and ethnic minorities, Makris says. She expects demographics of new C-Class buyers to move to an average age of 42 years old, down from 48, while average household income rises to $100,000, from $93,000. About 30 percent of buyers will be minorities, up from 20 percent today.

To achieve those goals the new C-Class will come with only V-6 engines, in either 2.6L or 3.2L displacements, and the base car will be fitted with a six-speed manual transmission -- the first time a Mercedes sedan in the U.S. has offered a manual in seven years.

And there's more to come. For the 2002 model year Mercedes will add high-performance AMG and Designio versions, as well as the 4Matic all-wheel-drive system. Analysts also expect station wagon and hatchback body styles to join the U.S. lineup. That model, originally aimed at Europe, would carry less electronic equipment as standard and have a lower base price, which Mercedes believes would help grow its owner base. But it's a risky move. Hatchbacks haven't been a popular body style in the U.S. market in more than a decade. Currently, only Saab markets a hatchback in the near-luxury segment after BMW discontinued the 318ti after the 1999 model year.