AM Online

MERCEDES-BENZ

Mercedes is struggling to cope with the twin challenges of rapidly expanding volume and unfavourable price comparisons with continental Europe. The result is falling residual values, falling order books and falling profits. In the overall NFDA ranking, the brand has dropped from third to 11th. Future profit potential is considered low with the company scoring its lowest rating since the survey began. But dealers are not about to give up the franchise and the network remains stable, provided they all survive the current crisis. Volumes are up and the A-class has brought a new type of customer into the showroom, encouraged by imaginative finance packages and heavy advertising. The M-class also takes the brand into new territory. Used car demand is high, particularly now forecourt prices have dropped, but fleet managers and contract hire companies are likely to treat the concept of rock-hard Mercedes residuals with caution in the future.

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